S-4

As filed with the Securities and Exchange Commission on September 1, 2011

Registration No. 333-      

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form S-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

MERGE HEALTHCARE INCORPORATED

(Exact name of registrant as specified in its charter)

SEE TABLE OF ADDITIONAL REGISTRANTS

Delaware
(State or other jurisdiction of
incorporation or organization) 7373
(Primary Standard Industrial
Classification Code Number) 39-1600938
(I.R.S. Employer
Identification No.)

200 East Randolph Street, 24th Floor

Chicago, Illinois 60601-6436

(312) 565-6868

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

Jeffery A. Surges

Chief Executive Officer

Merge Healthcare Incorporated

200 East Randolph Street, 24th Floor

Chicago, Illinois 60601-6436

(312) 565-6868

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copy to:

Ann Mayberry-French

Vice President, General Counsel and Secretary

Merge Healthcare Incorporated

900 Walnut Ridge Drive

Hartland, Wisconsin 53029

(262) 367-0700

Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.

If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.  o

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated filer o	Accelerated filer þ	Non-accelerated filer o	Smaller reporting company o
	(Do not check if a small reporting company)

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issues Tender Offer)  o

Exchange Act Rule 14d-1(d) (Cross-Border Third — Party Tender Offer)  o

CALCULATION OF REGISTRATION FEE

		Proposed Maximum	Proposed Maximum	Amount of
Title of Each Class of	Amount	Offering Price	Aggregate	Registration
Securities to be Registered	to be Registered	per Security	Offering Price(1)	Fee
11.75% Senior Secured Notes due 2015(2)	$52,000,000	100%	$52,000,000	$6,037.20
Guarantees of the 11.75% Senior Secured Notes due 2015(3)	N/A	N/A	N/A	N/A

(1)	Estimated solely for the purposes of calculating the registration fee in accordance with Rule 457(f)(2) under the Securities Act of 1933, as amended (the “Securities Act”).
(2)	The 11.75% Senior Secured Notes due 2015 are the obligations of Merge Healthcare Incorporated.
(3)	Each of the entities listed on the table of additional registrants on the next page of this Registration Statement will guarantee on an unconditional basis the obligations of Merge Healthcare Incorporated under the 11.75% Senior Secured Notes due 2015. No separate consideration was received for the guarantees, and no separate fee is payable, pursuant to Rule 457(n) under the Securities Act. The guarantees are not traded separately.

The Registrants hereby amend this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrants shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

TABLE OF ADDITIONAL REGISTRANTS

The following subsidiaries of Merge Healthcare Incorporated are Registrant Guarantors:

	State or Other
	Jurisdiction of	Primary Standard		I.R.S. Employer
Exact Name of Registrant Guarantor as	Incorporation or	Industrial		Identification
Specified in its Charter	Organization	Classification Number		Number
Abraxas Medical Solutions, Inc.	Delaware		3841		26-1525385
AMICAS, Inc. (now Merge Healthcare Solutions Inc.)	Delaware		7372		59-2248411
Confirma Europe LLC	Washington		7373		N/A
Merge Asset Management Corp.	Delaware		7373		N/A
Merge eClinical Inc.	Delaware		7373		20-0308891
Ophthalmic Imaging Systems	California		3841		94-3035367
Requisite Software Inc.	Delaware		7373		27-1023435
Stryker Imaging Corporation	Delaware		7373		65-1017159

The address, including zip code, and telephone number, including area code, of the principal executive office of each Registrant Guarantor listed above are the same as those of Merge Healthcare Incorporated.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission relating to these securities is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION DATED SEPTEMBER 1, 2011.

PRELIMINARY PROSPECTUS

Merge Healthcare Incorporated
Offer to Exchange

$52,000,000 principal amount of its 11.75% Senior Secured Notes due 2015,
which have been registered under the Securities Act of 1933, for any and all of
its outstanding 11.75% Senior Secured Notes due 2015

We are offering to exchange all of our outstanding 11.75% Senior Secured Notes due 2015 that we issued on June 20, 2011, which we refer to as the old notes, for new 11.75% Senior Secured Notes due 2015, in an exchange transaction that is being registered hereby. The terms of the exchange notes are identical to the terms of the old notes except that the transaction in which you may elect to receive the exchange notes has been registered under the Securities Act of 1933, as amended, or the Securities Act, and, therefore, the exchange notes are freely transferable.

The old notes constitute a further issuance of the $200,000,000 aggregate principal amount of 11.75% Senior Secured Notes due 2015 that we issued on April 28, 2010 (the “April 2010 notes”) and form a single series of debt securities with the April 2010 notes. Unless the context requires otherwise, we refer to the old notes, the exchange notes and the April 2010 notes together as the “notes” or “Notes.” The old notes have identical terms to the April 2010 notes (as modified by the consent solicitation described herein), other than the issue date and offering price and, following the completion of this exchange offer, the exchange notes will be fungible with the April 2010 notes. The aggregate principal amount of notes is $252,000,000. Accordingly, the $52,000,000 aggregate principal amount of exchange notes constitute approximately one-fifth of the total voting power of the $252,000,000 of outstanding notes.

We will pay interest on the notes on May 1 and November 1 of each year, beginning on November 1, 2011. The notes will mature on May 1, 2015.

At any time on or prior to May 1, 2013, we may redeem any of the notes at a price equal to 100% of the principal amount thereof plus an applicable “make-whole” premium plus accrued and unpaid interest, if any, to the redemption date, as described in this prospectus. At any time and from time to time during the twelve month period commencing May 1, 2013, we may redeem the notes, in whole or in part, at a redemption price equal to 105.875% of the principal amount thereof and accrued and unpaid interest, if any, to the redemption date. At any time and from time to time after May 1, 2014, we may redeem the notes, in whole or in part, at a redemption price equal to 100% of the principal amount thereof and accrued and unpaid interest, if any, to the redemption date. In addition, prior to May 1, 2013, we may redeem up to 35% of the notes at a redemption price equal to 111.75% of the principal amount thereof plus accrued and unpaid interest, if any, using proceeds from permitted sales of certain kinds of our capital stock. Upon the occurrence of a change of control or the sale of substantially all of our assets, we may be required to repurchase some or all of the notes.

The obligations under the notes will be fully and unconditionally guaranteed, jointly and severally, on a senior, secured basis by all of our current and future domestic restricted subsidiaries. See “Description of the Exchange Notes.” The notes and guarantees will be secured by a first-priority lien on certain collateral which comprises substantially all of our and the guarantors’ tangible and intangible assets, subject to certain exceptions.

The principal features of the exchange offer are as follows:

•  The exchange offer expires at 5:00 p.m., Eastern time, on           2011, unless extended.

•  All old notes that are validly tendered and not validly withdrawn prior to the expiration of the exchange offer will be exchanged for exchange notes.

•  You may withdraw tendered old notes at any time prior to the expiration of the exchange offer.

•  The exchange of old notes for exchange notes pursuant to the exchange offer should not be a taxable event for United States federal income tax purposes.

•  We will not receive any proceeds from the exchange offer.

•  We do not intend to apply for listing of the notes on any securities exchange or for inclusion of the notes in any automated quotation system.

Broker-dealers receiving exchange notes in exchange for old notes acquired for their own account through market-making or other trading activities must deliver a prospectus in any resale of the exchange notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of exchange notes received in exchange for old notes where the old notes were acquired by the broker-dealer as a result of market-making or other trading activities.

See “Risk Factors” beginning on page 14 to read about important factors you should consider in connection with the exchange offer.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is          , 2011.

Each broker-dealer that receives exchange notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. The letter of transmittal accompanying this prospectus states that, by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of exchange notes received in exchange for old notes where the original notes were acquired by the broker-dealer as a result of market-making or other trading activities. We have agreed that, starting on the expiration date of the exchange offer and ending on the close of business 180 days after the expiration date of the exchange offer, we will make this prospectus available to any broker-dealer for use in connection with any such resale. See “Plan of Distribution.”

This prospectus incorporates important business and financial information about us that is not included in or delivered with this document. See “Incorporation of Documents by Reference” on page 88 for a listing of documents we incorporate by reference.

We have not authorized any dealer, salesman or other person to give any information or to make any representation other than those contained or incorporated by reference in this prospectus. You must not rely upon any information or representation not contained or incorporated by reference in this prospectus as if we had authorized it. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities other than the registered securities to which it relates, nor does this prospectus constitute an offer to sell or a solicitation of an offer to buy securities in any jurisdiction to any person to whom it is unlawful to make such offer or solicitation in such jurisdiction.

Industry and Market Data

Market data used throughout this prospectus, including information relating to our relative position in the commercial and individual markets in which we operate, is based on the good faith estimates of management, which estimates are based upon their review of internal surveys, independent industry publications and other publicly available information. Although we believe that these sources are reliable, we do not guarantee the accuracy or completeness of this information, and we have not independently verified this information.

Trademarks, Service Marks and Trade Names

We own or have rights to various trademarks used in our business including: Frontiers AIMS, eFilm Archive, Merge Mammo, Fusion PACS, Fusion RIS, Fusion RIS/PACS MX, CADstream, Cedara WebAccess, Cedara I-Reach, Cedara Open Eyes, Merge-COM, etrials, CadStream and eFilm Workstation. We do not intend our use or display of other parties’ trademarks, trade names or service marks to imply, and such use or display should not be construed to imply, a relationship with, or endorsement or sponsorship of us by, these other parties.

TABLE OF CONTENTS

PROSPECTUS SUMMARY	1
RISK FACTORS	14
FORWARD-LOOKING STATEMENTS	23
USE OF PROCEEDS	24
CAPITALIZATION	25
SELECTED CONSOLIDATED FINANCIAL DATA	26
RATIO OF EARNINGS TO FIXED CHARGES	27
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS	27
THE EXCHANGE OFFER	28
DESCRIPTION OF THE EXCHANGE NOTES	36
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS	82
PLAN OF DISTRIBUTION	86
LEGAL MATTERS	87
EXPERTS	87
WHERE YOU CAN FIND MORE INFORMATION	88
INCORPORATION OF DOCUMENTS BY REFERENCE	88
EX-4.4
EX-5.1
EX-12.1
EX-23.1
EX-23.2
EX-23.3
EX-23.4
EX-25.1
EX-99.1
EX-99.2
EX-99.3
EX-99.4
EX-99.5
EX-99.6
EX-99.7
EX-99.8

PROSPECTUS SUMMARY

This summary contains basic information about our company and the offering and highlights selected information contained elsewhere or incorporated by reference in this prospectus. This summary is not complete and does not contain all of the information that you should consider before deciding whether or not to complete the exchange offer. For a more complete understanding of our company and the exchange offer, you should read this entire prospectus, including “Risk Factors”, and the financial information and the related notes thereto included elsewhere or incorporated by reference in this prospectus.

In this prospectus, (i) the term “Merge” means Merge Healthcare Incorporated and its subsidiaries and (ii) the terms “we,” “us,” “our,” and “our company” refer to Merge, unless the context suggests otherwise.

Overview

Merge Healthcare Incorporated, along with its subsidiaries and affiliates (collectively, “Merge,” “we,” “us,” or “our”), is an enterprise image provider dedicated to healthcare information technology (“IT”) solutions. We develop software solutions that automate healthcare data and diagnostic workflow to create a more comprehensive electronic record of the patient experience. Our solutions are designed to help solve some of the toughest challenges in health information exchange today, such as the incorporation of medical images and diagnostic information into broader healthcare IT applications, the interoperability of proprietary software solutions, advanced clinical tools like computer aided detection (“CAD”), the profitability of outpatient imaging practices in the face of declining reimbursement and the ability to improve the efficiency and cost effectiveness of our customers’ businesses.

Merge was founded in 1987 and was reincorporated in Delaware on December 5, 2008. Our principal executive offices are located at 200 East Randolph Street, 24th Floor, Chicago, Illinois, 60601-6436, and our telephone number there is (312) 565-6868. Our website address, which we use to communicate important business information, can be accessed at: www.merge.com. The information on our website is not part of this prospectus.

Our products, ranging from standards-based development toolkits to fully integrated clinical applications, have been used by healthcare providers worldwide for over 20 years. Our solutions optimize processes for healthcare organizations ranging in size from single-doctor practices to health systems, for the sponsors of clinical trials, for the medical device industry, for the healthcare commerce system and for consumers of healthcare. These solutions are licensed by more than 1,500 hospitals; 4,000 clinics and labs, 250 healthcare equipment manufacturers and 70% of the top pharmaceutical companies. On April 28, 2010, we acquired AMICAS, Inc. (now Merge Healthcare Solutions Inc.) and its subsidiaries for total consideration of approximately $223.9 million.

Merge primarily generates revenue from the sale of perpetual software licenses (limited by volume), upgrading and/or renewing those licenses, hardware, professional services and maintenance. The first four contract elements comprise the majority of non-recurring revenue. Our backlog of non-recurring revenue was approximately $40.1 million as of June 30, 2011. Maintenance, which we renew annually with our customer base, is the primary component of recurring revenues. Recurring revenue also includes software licenses sold through contracts that are annually renewed and recognized ratably over the annual period and recorded as software revenue, and revenues derived from SaaS offerings which are recorded as professional services revenue. During 2010 and the first quarter of 2011, recurring revenue was approximately 65% of total net

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sales. During the second quarter of 2011, recurring revenue was approximately 62.5% of total net sales. The following table presents our consolidated revenues by category, as a percentage of total revenues for software and other sales, professional services and maintenance and electronic data interchange (“EDI”):

	Six Months
	Ended			Years Ended December 31,
	June 30, 2011			2010			2009			2008
Net sales:
Software and other		31.7	%		30.2	%		49.4	%		48.6	%
Professional services		18.9	%		16.5	%		17.7	%		15.1	%
Maintenance and EDI		49.4	%		53.3	%		32.9	%		36.3	%
Total net sales		100.0	%		100.0	%		100.0	%		100.0	%

Healthcare IT Industry

We believe there are several factors that are favorable for the global healthcare IT industry over the next decade. The broad recognition that healthcare IT is essential to helping control healthcare costs and improving quality contributed to the inclusion of healthcare IT incentives in the American Recovery and Reinvestment Act (“ARRA”). The ARRA and accompanying Health Information Technology for Economic and Clinical Health (“HITECH”) provisions include more than $35 billion in incentives, which reward providers who use certified electronic health records (“EHRs”) in a meaningful way. These incentives are contributing to increased demand for healthcare IT solutions and services in the United States. We believe long-term revenue growth opportunities outside the United States remain significant because other countries are also focused on controlling healthcare spending while improving the efficiency and quality of care that is delivered, and many of these countries recognize healthcare IT as an important piece of the solution to these issues.

We believe that an EHR can only be considered meaningful if imaging data is included. As providers adopt EHRs, we believe the need for solutions such as our iConnect platform, which offers connectivity, access to the image and interoperability between providers and other healthcare constituents, will be critical. Imaging continues to be a critical component of healthcare delivery across the continuum of care. Increasing physician awareness and utilization of imaging as a standard of care to aid in patient diagnosis (including its use as a preventive screening method), as well as an increased availability of diagnostic imaging equipment in medical centers and hospitals, has fueled the growth of the diagnostic imaging industry. In addition, U.S. demographic trends and the opportunity for greater international adoption of medical imaging should provide the basis for long-term, sustainable growth in imaging volumes. Merge is well positioned to benefit from this expected increase in demand due to our large footprint in United States hospitals and physician practices and our proven ability to deliver value to our clients. Based on information from consulting firm Frost & Sullivan and our own research, we believe the global market for imaging software and services, healthcare IT interoperability solutions, digital pathology and imaging in clinical trials is $6.5 billion annually.

We believe that we have positioned ourselves to provide value added solutions and services to our customers amidst potential changes in industry standards and regulations. We believe the fundamental value proposition of healthcare IT remains strong and that the industry will likely benefit as healthcare providers and governments continue to recognize that these solutions and services contribute to safer, more efficient healthcare.

Merge Growth Strategy

Our strategy is to be a leading provider of integrated, global healthcare IT solutions and services that improve the exchange of healthcare information. Our business strategy is anchored by the breadth and depth of our solutions and services, our proven ability to deliver value and the success of our customers. We believe the growth drivers for Merge are the importance of imaging, the opportunity around meaningful use of EHRs, and the need for interoperability. Imaging continues to be a critical component of healthcare delivery across the continuum of care. We believe it has become abundantly clear that an electronic medical record can only be considered meaningful if imaging data is included.

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A core strength that has led to our strong market position is our proven ability to innovate, which has driven consistent expansion of solutions and services and entry into new markets. We currently own approximately 70 patents issued in various jurisdictions and continue to expand our IP portfolio. Our award-winning portfolio of technologies is used across a wide variety of clinical specialties in addition to being an increasingly important component of clinical trials. For example, our iConnect platform offers hospitals, imaging centers and Health Information Exchanges the ability to create information exchanges within their environment and with other entities. As providers adopt electronic health records, we believe the need for solutions that offer connectivity and interoperability between providers and other healthcare constituents will be a new multi-billion dollar opportunity for which Merge is uniquely positioned to compete.

As part of our strategy, we will look to expand through strategic acquisitions that will also allow us to further expand our addressable market and customer base. We believe that our acquisitions in 2010 and 2009 have allowed, and our recently completed acquisition of Ophthalmic Imaging Systems (“OIS”) will allow, us to expand our product offering as well as provide greater penetration into existing market segments. As a result of these acquisitions, we have extended our addressable market to include other specialties, such as solutions for the orthopaedics and laboratory markets and have increased the depth of our solution portfolio for existing customers and new prospects to include additional automation capabilities via patient kiosks. Our acquisition of OIS on August 4, 2011 added opthamalic imaging to our portfolio.

We have an opportunity to grow revenues by expanding our solution footprint with existing customers, as only a small percent currently have more than one of our solutions, representing a significant cross sell opportunity. This is supported by the fact that no customer accounted for more than 10% of our net sales in three years ended December 31, 2010. With the benefit of a broad customer base and several product lines undergoing ongoing innovation, we also believe that we are well-positioned to continue to leverage technologies into new segments where customers see value. For example, as providers adopt EHRs and seek to qualify for meaningful use incentives, our vendor-neutral archiving and web-based image access products will help providers facilitate meaningful use and accountable care initiatives.

We believe our strengths position us well to gain market share in the United States during a period of expected strong demand driven by the HITECH provisions of ARRA and the nation’s focus on improving the efficiency and quality of healthcare. We also have a strong global brand, as evidenced by our popular eFilm Workstation that has over 100,000 downloads. Also, Merge has sold products in more than 50 countries. We believe that we have a good opportunity to gain market share outside of the United States.

Our Product Portfolio

We provide a broad range of products and services to our customers, including:

•  Image Interoperability Platform

•  iConnect:  This interoperability and connectivity platform offers hospitals, imaging centers, Integrated Delivery Networks and Health Information Exchanges the ability to create information exchanges within their environments and with other entities. This platform provides access to imaging and diagnostic data across disparate sites, geographies, specialties and providers. This solution enables providers to expedite care, reduce duplicate exams, consolidate infrastructure and limit the expenses associated with moving, managing and storage of diagnostic content and results.

•  Clinical and Financial Information Systems

•  Digital Imaging Solutions:  Picture Archiving and Communication Systems (“PACS”), specialty workstations and related applications manage the image workflow of a medical enterprise. PACS can be used by any medical imaging provider at a hospital or outpatient imaging site. We offer PACS solutions for general image review and management, specialty solutions for cardiology, orthopaedics, mammography and oncology, and add-on modules like referring physician portals and critical test results reporting. We also offer the popular eFilm Workstation for general radiology reading and CADstream workstation for specialty reading of magnetic resonance imaging (“MRI”) breast, liver and prostate studies. With our recently completed OIS acquisition, we have expanded our product

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offerings to include ophthalmic imaging systems, integrated electronic medical records and practice management solutions for the eye care market.

•  Clinical information systems:  These systems provide a complete electronic record of a medical procedure across a variety of specialties — including Merge OrthoEMR for orthopaedics, Merge Anesthesia Information Management System for surgery, Merge RIS for radiology and OIS for ophthalmology.

•  Revenue Cycle Management:  We offer software and services for the revenue cycle management of physician practices. These solutions can be used across a number of physician specialties, but our solutions are most commonly used by radiology practices, imaging centers and billing services

•  Software Development Toolkits, Technologies and Platforms.

•  Merge toolkits, technologies and platforms provide software developers with the necessary resources to assist in the timely development of new products and enhance existing products. They can be used by any original equipment manufacturer (“OEM”), medical device manufacturer, RIS/PACS vendor or general healthcare IT vendor. We offer development toolkits in the basic standards of medical imaging and information interoperability, as well as advanced toolkits and unfinished applications for specialized medical image review and distribution.

•  Hosted Software Solutions for Clinical Trial Data Management.

•  We provide hosted software solutions for the collection, aggregation, analysis, reporting and overall management of clinical trials information. These solutions can be sold to sponsors of clinical trials, including a pharmaceutical company, a contract research organization (“CRO”) or an imaging core lab. Our solutions include electronic data capture (“EDC”), interactive voice/web response (“IVR/IWR”) and electronic patient reported outcomes (“ePRO”) software and devices.

Competition

The healthcare IT and imaging markets in which we participate are highly competitive, rapidly evolving and subject to rapid technological change. However, we believe that there is no single company that competes against our entire product portfolio.

Our principal competitors in the healthcare solutions and services market include: General Electric Company (Healthcare), McKesson Corporation, Cerner Corporation, Philips, Carestream, and Agfa, each of which offers software solutions that compete with a portion of our product portfolio. Almost all of these competitors are substantially larger or have more experience and market share than us in their respective market. We also partner with certain of these companies to resell our products.

Other competitors focus on only a very specific portion of the market that we address or against specific products we sell. For example, there are 30 other companies in the North American PACS market, according to Frost & Sullivan. These companies include imaging equipment original equipment manufacturers, former film companies and healthcare IT companies. Our CAD product line for breast, liver and/or prostate cancer diagnostic support competes with iCAD, InVivo (Philips), Sentinelle and Hologic. Our eClinical product line is in a highly competitive market lead by Phase Forward (recently acquired by Oracle) and Medidata. Our OEM technologies most often compete with internal development departments. Our OEM toolkits face a limited number of competitors and we believe that we are the only vendor to provide a combined Digital Imaging and Communications in Medicine (“DICOM”) and Health Level 7 (“HL7”) toolkit.

In addition, we expect that major software information systems companies, large information technology consulting service providers and system integrators, start-up companies, managed care companies and others specializing in the healthcare industry may offer competitive software solutions or services. The pace of change in the healthcare IT market is rapid and there are frequent new software solutions or service introductions, enhancements and evolving industry standards and requirements. We believe that the principal competitive factors in this market include the breadth and quality of solution and service offerings, the stability

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of the solution provider, the quality, features and performance of the products, the ongoing support for the systems and the potential for enhancements and future compatible software solutions.

Employees

As of June 30, 2011, we had approximately 800 employees world-wide. Competition for technical personnel in the industry in which we compete is intense. We believe that our future success depends in part on our continued ability to hire, assimilate, and retain qualified personnel.

Software Development

We commit significant resources to developing new health information system solutions. As of June 30, 2011, approximately 200 of our employees were engaged in research and development activities. Total expenditures for the development and enhancement of our software solutions were approximately $20.1 million, $10.7 million and $13.2 million during 2010, 2009 and 2008, respectively.

Our products, ranging from standards-based development toolkits to fully integrated clinical applications, have been used by healthcare providers worldwide for over 20 years. Our software solutions follow industry standards such as DICOM, which ensures that images from any DICOM-compliant modality can be displayed, moved and stored within a standard set of guidelines; and HL7, which provides standards for the movement of other health information file formats. In addition, Merge participates in the Integrating the Healthcare Enterprise (“IHE”), an organization dedicated to developing standard profiles for health information exchange. Our long-time involvement with the standards committees and continuous development of products like our DICOM and HL7 toolkits have enabled Merge to stay closely tied to industry innovation. As discussed above, continued investment in research and development remains a core element of our strategy. This will include ongoing enhancement of our core solutions and development of new solutions and services.

Sales, Marketing and Distribution

Sales to large health systems typically take more than nine months, while the sales cycle is often shorter when selling to smaller hospitals and imaging centers. In order to ramp up our sales and market presence, we began aggressively hiring in the fourth quarter of 2010. As of June 30, 2011, approximately 150 of our employees were engaged in sales and marketing activities. Our executive sales and marketing management is located at our Innovation Center in Chicago, Illinois, while our sales team is deployed across the United States and globally.

We employ quota-based sales teams that specialize in particular product lines. In addition, we have sales teams dedicated to establishing and maintaining VAR and distributor relationships globally. Where feasible, we have concentrated inside and telesales staff in one location in order to bring economies of scale in management and process. Our sales teams are complemented by a staff of lead generation and marketing employees. These teams have the benefit of online tools and resources that streamline and track the sales process.

Our marketing efforts are mainly electronic, utilizing our website and our extensive email database of eStore customers for our communication campaigns, as well as our website for online communities and certain social media. Beyond electronic media, we employ consistent media relations efforts for market communication. In addition, we participate in the major industry trade shows for our respective product lines. We also have an active User Group for our U.S. customers.

Recent Developments

Acquisition of Ophthalmic Imaging Systems

On August 4, 2011, we completed our acquisition of Ophthalmic Imaging Systems (“OIS”). Under the terms set forth in the Agreement and Plan of Merger entered into with OIS on June 5, 2011, each share of OIS common stock was converted into the right to receive 0.1693 shares of our common stock. We issued approximately 5,132,000 shares in connection with the transaction. Based on the per share price of our

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common stock as of the close of trading on August 4, 2011, the aggregate value of our common stock issued as consideration in the OIS Acquisition was approximately $29,150,000.

Consent Solicitation and Redemption of Series A Non-Voting Preferred Stock

On June 7, 2011, we commenced a consent solicitation (the “Solicitation”) to holders of the April 2010 notes pursuant to a consent solicitation statement in order to amend certain covenants in the indenture governing the April 2010 notes to allow us to redeem and retire our Series A Non-Voting Preferred Stock and to undertake the offering of the old notes. On June 14, 2011, the Company received the requisite consents to approve the proposed amendments to the indenture in order to facilitate the offering of the old notes. On June 20, 2011, we issued the old notes and completed the redemption of our Series A Non-Voting Preferred Stock using proceeds from the issuance of the old notes.

The Offering of the Old Notes

On June 20, 2011, we completed an offering of $52 million in aggregate principal amount of 11.75% Senior Secured Notes due 2015, which was exempt from registration under the Securities Act.

Old Notes	We sold the old notes to Morgan Stanley & Co. LLC the initial purchaser on June 20, 2011. The initial purchaser subsequently resold the old notes to qualified institutional buyers pursuant to Rule 144A under the Securities Act.
Registration Rights Agreement	In connection with the sale of the old notes, we and the subsidiary guarantors, which we refer to as the guarantors, entered into a registration rights agreement with the initial purchaser. Under the terms of the registration rights agreement, we and the guarantors agreed to: (1) file a registration statement for the exchange offer of the new notes with the SEC not later than 90 days after the date of original issuance of the old notes, and (2) use commercially reasonable efforts to have the registration statement declared effective by the SEC not later than 180 days after the date of original issuance of the old notes.
	Under specified circumstances, we and the guarantors will, at our cost, (a) as promptly as practicable (but in no event more than 60 days after so required or requested in accordance with the above), file a registration statement (the “shelf registration statement”) covering resales of the notes or the exchange notes, as the case may be, (b) use our commercially reasonable efforts to cause the shelf registration statement to be declared effective under the Securities Act within 120 days after so required or requested and (c) use our commercially reasonable efforts to keep the shelf registration statement effective until two years after its effective date.
	If (a) either the exchange offer registration statement or the shelf registration statement has not been filed with the SEC as required

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by the registration rights agreement, (b) either the exchange offer registration statement or the shelf registration statement has not been declared effective as required by the registration rights agreement, or (c) after either the exchange offer registration statement or the shelf registration statement has been declared effective, such registration statement thereafter ceases to be effective or usable (subject to certain exceptions) in connection with resales of notes or exchange notes in accordance with and during the periods specified in the registration rights agreement, (each such event referred to in clauses (a) through (c), a “registration default”), we shall pay liquidated damages (“registration default damages”) to the holders of the old notes and the exchange notes. Registration default damages shall accrue at a rate of 0.25% per annum for the first 60 days from and including the date of a registration default and at a rate of 0.50% thereafter.

The Exchange Offer

Exchange Offer	$2,000 principal amount of exchange notes will be issued in exchange for each $2,000 principal amount of old notes validly tendered and integral multiples of $1,000 in excess thereof.
Resale	Based upon interpretations by the staff of the SEC set forth in no-action letters issued to unrelated third parties, we believe that the exchange notes may be offered for resale, resold or otherwise transferred by you without compliance with the registration and prospectus delivery requirements of the Securities Act, unless you:
	• are an “affiliate” of Merge Healthcare Incorporated or any guarantor within the meaning of Rule 405 under the Securities Act;
	• acquired the exchange notes other than in the ordinary course of your business;
	• have an arrangement or understanding with any person to engage in the distribution of the exchange notes; or
	• are engaging in or intend to engage in a distribution of the exchange notes.
	If you are a broker-dealer and receive exchange notes for your own account in exchange for old notes that you acquired as a result of market-making activities or other trading activities, you must acknowledge that you will deliver this prospectus in connection with any resale of the exchange notes. See “Plan of Distribution.”
	Any holder of old notes who:
	• is an affiliate of Merge Healthcare Incorporated or any guarantor;
	• does not acquire exchange notes in the ordinary course of its business; or
	• tenders its old notes in the exchange offer with the intention to participate, or for the purpose of participating, in a distribution of exchange notes,

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	cannot rely on the position of the staff of the SEC enunciated in Morgan Stanley & Co. Incorporated (available June 5, 1991) and Exxon Capital Holdings Corp. (available May 13, 1988), as interpreted in the SEC’s letter to Shearman & Sterling, publicly available July 2, 1993, or similar no-action letters and, in the absence of an exemption therefrom, must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale of the exchange notes.
Expiration Date	The exchange offer will expire at 5:00 p.m., Eastern time, on          , 2011, which we refer to as the expiration date, unless we, in our sole discretion, extend it.
Conditions to Exchange Offer	The exchange offer is subject to certain conditions, some of which may be waived by us. See “The Exchange Offer — Conditions to the Exchange Offer.”
Procedure for Tendering Old Notes	If you wish to accept the exchange offer, you must complete, sign and date the letter of transmittal, or a copy of the letter of transmittal, in accordance with the instructions contained in this prospectus and in the letter of transmittal, and mail or otherwise deliver the letter of transmittal, or the copy, together with the old notes and any other required documentation, to the exchange agent at the address set forth in this prospectus and in the letter of transmittal.
	If you hold old notes through The Depositary Trust Company, which we refer to as DTC, and wish to participate in the exchange offer, you must comply with the Automated Tender Offer Program procedures of DTC by which you will agree to be bound by the letter of transmittal.
	By signing, or agreeing to be bound by, the letter of transmittal, you will represent to us that, among other things:
	• you are not an “affiliate” of Merge Healthcare Incorporated or any guarantor within the meaning of Rule 405 under the Securities Act;
	• you are acquiring the exchange notes in the ordinary course of your business;
	• you do not have an arrangement or understanding with any person to engage in the distribution of the exchange notes;
	• you are not engaging in or intend to engage in a distribution of the exchange notes; and
	• if you are a broker-dealer that will receive exchange notes for your own account in exchange for old notes that were acquired as a result of market-making activities or other trading activities, that you will comply with the applicable provisions of the Securities Act (including, but not limited to, the prospectus delivery requirements thereunder).
	We will accept for exchange any and all old notes that are properly tendered in the exchange offer prior to the expiration date. The exchange notes issued in the exchange offer will be delivered

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	promptly following the expiration date. See “The Exchange Offer — Procedures For Tendering.”
Special Procedures for Beneficial Owners	If you are the beneficial owner of old notes registered in the name of a broker, dealer, commercial bank, trust company or other nominee and wish to tender in the exchange offer, you should contact the person in whose name your notes are registered and instruct the registered holder to tender the old notes on your behalf. If you wish to tender on your own behalf, you must, prior to completing and executing the letter of transmittal and delivering your old notes, either make appropriate arrangements to register ownership of the old notes in your name or obtain a properly completed bond power from the registered holder. The transfer of registered ownership may take considerable time and may not be able to be completed prior to the expiration date. See “The Exchange Offer — Procedures for Tendering.”
Guaranteed Delivery Procedures	If you wish to tender your old notes and your old notes are not immediately available or you cannot deliver your old notes, the letter of transmittal or any other required documents, or you cannot comply with the procedures under DTC’s Automated Tender Offer Program for transfer of book-entry interests, prior to the expiration date, you must tender your old notes according to the guaranteed delivery procedures set forth in this prospectus under “The Exchange Offer — Guaranteed Delivery Procedures.”
Withdrawal Rights	The tender of the old notes pursuant to the exchange offer may be withdrawn at any time prior to 5:00 p.m., Eastern time, on the expiration date.
Acceptance of Old Notes and Delivery of Exchange Notes	Subject to customary conditions, we will accept old notes which are properly tendered in the exchange offer and not withdrawn prior to the expiration date. The exchange notes will be delivered promptly following the expiration date.
Effect of Not Tendering	Any old notes that are not tendered or that are tendered but not accepted will remain subject to the restrictions on transfer. Since the old notes have not been registered under the federal securities laws, they bear a legend restricting their transfer absent registration or the availability of a specific exemption from registration. Upon completion of the exchange offer, we will have no further obligations, except under limited circumstances, to provide for registration of the old notes under the federal securities laws.
Interest on the Exchange Notes and the Old Notes	Upon issuance, the exchange notes will bear interest equal to the accrued and unpaid interest on the old notes. Interest on the old notes accepted for exchange will cease to accrue upon the issuance of the exchange notes.
United States Federal Income Tax Consequences	The exchange of old notes for exchange notes by tendering holders should not be a taxable exchange for federal income tax purposes. See “United States Federal Income Tax Consequences.”

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Exchange Agent	The Bank of New York Mellon Trust Company, N.A., the trustee under the indenture, is serving as exchange agent in connection with the exchange offer.
Use of Proceeds	We will not receive any proceeds from the issuance of exchange notes pursuant to the exchange offer.

Summary of Terms of Exchange Notes

The summary below describes the principal terms of the exchange notes. Certain of the terms and conditions described below are subject to important limitations and exceptions. The “Description of the Exchange Notes” section of this prospectus contains a more detailed description of the terms and conditions of the exchange notes. The exchange notes will have terms identical in all material respects to the old notes, except that the exchange notes will not contain terms with respect to transfer restrictions, registration rights and additional interest for failure to observe certain obligations in the registration rights agreement.

Issuer	Merge Healthcare Incorporated
Notes Offered	The $52,000,000 aggregate principal amount of 11.75% Senior Secured Notes due 2015 that we issued on June 20, 2011 (the “old notes”) constitute a further issuance of the $200,000,000 aggregate principal amount of 11.75% Senior Secured Notes due 2015 that we issued on April 28, 2010 (the “April 2010 notes”) and form a single series of debt securities with the April 2010 notes. Unless the context requires otherwise, we refer to the old notes, the exchange notes and the April 2010 notes together as the “notes” or “Notes.” The old notes have identical terms to the April 2010 notes (as modified by the consent solicitation described herein), other than the issue date and offering price and, following the completion of this exchange offer, the exchange notes will be fungible with the April 2010 notes. The aggregate principal amount of notes is $252,000,000. Accordingly, the $52,000,000 aggregate principal amount of exchange notes constitute approximately one-fifth of the total voting power of the $252,000,000 of outstanding notes.
Maturity Date	May 1, 2015.
Interest	Interest will be payable in cash on May 1 and November 1 of each year, beginning November 1, 2011.
Optional Redemption	At any time on or prior to May 1, 2013, we may redeem any of the notes at a price equal to 100% of the principal amount of notes to be redeemed plus an applicable “make-whole” premium, plus accrued and unpaid interest, if any, to the redemption date.
	On or after May 1, 2013, we may redeem the notes, in whole or in part, at the redemption prices described in this prospectus, plus accrued and unpaid interest, if any, to the applicable redemption date.
	In addition, prior to May 1, 2013, we may redeem up to 35% of the aggregate principal amount of the notes at a redemption price equal to 111.75%, plus accrued and unpaid interest, if any, to the redemption date, with the net cash proceeds that we raise in one or more equity offerings. See “Description of the Exchange Notes — Optional Redemption.”

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Note Guarantees	The notes are fully and unconditionally guaranteed on a senior secured basis by each of our current and future domestic restricted subsidiaries. In the future, the note guarantees may be released or terminated under certain circumstances. See “Description of the Exchange Notes — Note Guarantees.”
Collateral	The notes and the note guarantees are secured by first priority security interests, subject to certain exceptions, in substantially all of our and the guarantors’ tangible and intangible assets whether now owned or hereafter acquired or arising, and wherever located. See “Description of the Exchange Notes — Collateral and Security.”
Ranking	The notes:
	• are our general senior obligations;
	• are secured on a first-priority lien basis by the Collateral (as defined in “Description of the Exchange Notes — Collateral and Security”), subject to certain exceptions;
	• rank equally in right of payment with all of our existing and future senior indebtedness;
	• rank senior in right of payment to all of our existing and future subordinated indebtedness;
	• are structurally subordinated to all the existing and future indebtedness and other liabilities of our subsidiaries that are not guarantors; and
	• are guaranteed on a senior secured basis by each guarantor.
	Each note guarantee is:
	• a general senior obligation of each guarantor;
	• secured on a first-priority lien basis by the Collateral, subject to certain exceptions;
	• senior in right of payment to all future obligations of such guarantor that are, by their terms, expressly subordinated in right of payment to such note guarantee; and
	• pari passu in right of payment with all existing and future unsecured obligations of such guarantor that are not so subordinated.
Change of Control	If a change of control occurs, the holders of the notes will have the right to require us to repurchase their notes, in whole or in part, at a repurchase price of 101% of the principal amount, plus accrued and unpaid interest, if any. See “Description of the Exchange Notes — Repurchase at the Option of Holders.”
Certain Covenants	The indenture governing the notes contains covenants that, among other things, limit our ability and the ability of our restricted subsidiaries to:
	• incur additional indebtedness and issue preferred stock;
	• pay dividends and make distributions in respect of capital stock;
	• make investments or certain other restricted payments;

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	• sell assets;
	• enter into transactions with stockholders or affiliates;
	• issue or sell stock of certain subsidiaries;
	• effect a consolidation or merger; and
	• engage in sale-leaseback transactions.
	These covenants are subject to a number of important limitations and exceptions, including the suspension thereof. See “Description of the Exchange Notes — Certain Covenants.”
No Public Market	The exchange notes will be freely transferable but will be new securities for which we expect there will not initially be a market. Accordingly, we cannot assure you whether a market for the exchange notes will develop or as to the liquidity of any market.
Qualified Reopening	The old notes are treated by us as having been issued in a “qualified reopening” for United States federal income tax purposes, and the following discussion assumes such treatment will be respected. Consequently, the old notes are and the exchange notes will be part of the same issue as the April 2010 notes. Because the April 2010 notes were issued with OID for United States federal income tax purposes, the old notes and exchange notes also have OID. However, as discussed in further detail below under “United States Federal Income Tax Considerations — U.S. Holders — Amortizable Premium,” since the initial offering price of the old notes is greater than their stated principal amount, investors who purchased old notes at their initial offering price will not be required to include any OID in income for United States federal income tax purposes. See “United States Federal Income Tax Considerations.”
Risk Factors	You should carefully consider all of the information set forth or incorporated by reference in this prospectus and, in particular, should evaluate the specific risk factors set forth in the section entitled “Risk Factors” for an explanation of certain risks of investing in the notes, including risks related to our business.

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SUMMARY CONSOLIDATED FINANCIAL DATA

The following table sets forth summary consolidated financial data of Merge Healthcare Incorporated as of the dates and for the periods indicated. The summary consolidated financial data as of and for the years ended December 31, 2010 and December 31, 2009, and for the year ended December 31, 2008, have been derived from our audited consolidated financial statements incorporated by reference in this prospectus. The summary consolidated financial data as of December 31, 2008 has been derived from our audited consolidated financial statements not included or incorporated by reference in this prospectus. The summary consolidated financial data as of and for the six months ended June 30, 2011 and 2010 have been derived from our unaudited consolidated financial statements as of such dates and for such periods incorporated by reference in this prospectus and which, in our opinion, reflect all adjustments, consisting of normal accruals, necessary for a fair presentation of the information as of the dates and for such periods presented. Our results of operations for the six months ended June 30, 2011 may not be indicative of results that may be expected for the full year.

The below summary consolidated financial data should be read in conjunction with the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” incorporated by reference herein from our Annual Report on Form 10-K for the year ended December 31, 2010 and our Quarterly Reports on Form 10-Q for the periods ended March 31, 2011 and June 30, 2011, as well as our consolidated financial statements and related notes thereto incorporated by reference in this prospectus.

	Six Months Ended						Years Ended
	June 30,						December 31,
	2011			2010			2010(1)			2009(2)			2008
	(Unaudited)
	(In thousands, except for share and per share data)
Statement of Operations Data:
Net sales	$	108,264		$	48,973		$	140,332		$	66,841		$	56,735
Operating income (loss)		13,945			(13,778	)		(8,524	)		8,963			(21,697	)
Income (loss) before income taxes		(403	)		(18,007	)		(25,162	)		150			(23,743	)
Income tax expense (benefit)		2,871			106			(13,646	)		(135	)		(60	)
Net income (loss)		(3,274	)		(18,113	)		(11,516	)		285			(23,683	)
Net income (loss) available to common shareholders		(6,427	)		(34,057	)		(30,592	)		285			(23,683	)
Earnings (loss) per share:
Basic	$	(0.08	)	$	(0.44	)	$	(0.38	)	$	0.00		$	(0.51	)
Diluted		(0.08	)		(0.44	)		(0.38	)		0.00			(0.51	)
Weighted average shares outstanding:
Basic		84,277,343			77,461,669			80,231,427			60,910,268			46,717,546
Diluted		84,277,343			77,461,669			80,231,427			62,737,821			46,717,546

	Six Months Ended
	June 30,				December 31,
	2011		2010		2010		2009		2008
	(Unaudited)
	(In thousands)
Balance Sheet Data:
Working capital		45,964		27,074	$	28,792	$	18,231	$	8,254
Total assets		395,619		359,704		396,388		100,249		54,737
Long-term debt obligations		249,065		194,708		195,077		—		14,230
Shareholders’ equity		55,356		91,807		104,806		68,137		8,841

(1)	Includes the results of AMICAS, Inc. (now Merge Healthcare Solutions Inc.) from April 28, 2010, the date of the business combination.
(2)	Includes the results of etrials and Confirma from July 20, 2009 and September 1, 2009, the respective dates of the business combinations.

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RISK FACTORS

You should carefully consider the risks described as well as the other information contained in this prospectus, as well as well as the other information included in this prospectus and the risk factors incorporated by reference into this prospectus from Part I, Item 1A,“Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2010 and from our Quarterly Report on Form 10-Q for the period ended June 30, 2011, before making a decision to participate in the exchange offer. The risks described below and incorporated herein by reference are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition or results of operations. Any of such risks could materially adversely affect our business, financial condition or results of operations. In such case, you may lose all or part of your original investment.

Risks Related to the Notes

We have a Substantial Amount of Indebtedness, which could Impact our Ability to Obtain Future Financing or Pursue our Growth Strategy.

We have substantial indebtedness. As of June 30, 2011, we would have had approximately $252.0 million of indebtedness, before taking into account outstanding letters of credit, subject to borrowing base limitations and other specified terms and conditions.

Our high level of indebtedness could have important consequences to you and significant adverse effects on our business, including the following:

•  we must use a substantial portion of our cash flow from operations to pay interest on our indebtedness, which will reduce the funds available to us for operations and other purposes;

•  our ability to obtain additional financing for working capital, capital expenditures, acquisitions or general corporate purposes may be impaired;

•  our high level of indebtedness could place us at a competitive disadvantage compared to our competitors that may have proportionately less indebtedness;

•  our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate may be limited;

•  our high level of indebtedness may make us more vulnerable to economic downturns and adverse developments in our business; and

•  our ability to fund a change of control offer may be limited.

The indenture governing the notes contains, and the instruments governing any indebtedness we may incur in the future may contain, restrictive covenants that limit our ability to engage in activities that may be in our long-term best interests. Our failure to comply with these covenants could result in an event of default which, if not cured or waived, could result in the acceleration of all or a portion of our outstanding indebtedness.

Payments on our Indebtedness will Require a Significant Amount of Cash. Our Ability to Meet our Cash Requirements and Service our Indebtedness is Impacted by many Factors that are Outside of our Control.

We expect to obtain the funds to pay our expenses and to pay the amounts due under the notes primarily from our operations. Our ability to meet our expenses and make these payments thus depends on our future performance, which will be affected by financial, business, economic and other factors, many of which we cannot control. Our business may not generate sufficient cash flow from operations in the future and our currently anticipated growth in revenue and cash flow may not be realized, either or both of which could result in our being unable to repay indebtedness, including the notes, or to fund other liquidity needs. If we do not have sufficient cash resources in the future, we may be required to refinance all or part of our then existing indebtedness, sell assets or borrow more money. We cannot assure you that we will be able to accomplish any

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of these alternatives on terms acceptable to us or at all. In addition, the terms of existing or future debt agreements may restrict us from adopting any of these alternatives. Our failure to generate sufficient cash flow or to achieve any of these alternatives could materially adversely affect the value of the notes and our ability to pay the amounts due under the notes. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” incorporated by reference herein from our Annual Report on Form 10-K for the year ended December 31, 2010 and our Quarterly Reports on Form 10-Q for the periods ended March 31, 2011 and June 30, 2011.

We may be Able to Incur Substantial Additional Indebtedness that could Further Exacerbate the Risks Associated with our Indebtedness.

We may incur substantial additional indebtedness in the future. Although the indenture governing the notes will contain restrictions on our incurrence of additional indebtedness, these restrictions are subject to a number of qualifications and exceptions, and we could incur substantial additional indebtedness, including additional secured indebtedness. If we incur additional indebtedness, the risks described above under “— We have a substantial amount of indebtedness, which could impact our ability to obtain future financing or pursue our growth strategy” and “— Payments on our indebtedness will require a significant amount of cash. Our ability to meet our cash requirements and service our indebtedness is impacted by many factors that are outside of our control” would intensify.

Restrictive Covenants in the Indenture may Limit our Current and Future Operations, Particularly our Ability to Respond to Changes in our Business or to Pursue our Business Strategies.

The terms of the indenture governing the notes contain, and any future indebtedness of ours may contain, a number of restrictive covenants that impose significant operating and financial restrictions, including restrictions on our ability to take actions that we believe may be in our interest. The indenture among other things, limits our ability to:

•  incur additional indebtedness and issue preferred stock;

•  pay dividends on or make distributions in respect of capital stock;

•  make investments or certain other restricted payments;

•  place limits on dividends and enter into other payment restrictions affecting certain subsidiaries;

•  enter into transactions with stockholders or affiliates;

•  create or incur liens;

•  enter into sale-leaseback transactions;

•  guarantee indebtedness;

•  merge, consolidate or sell substantially all of our assets; and

•  issue or sell stock of certain subsidiaries.

You should read the discussions under the heading “Description of the Exchange Notes — Certain Covenants” for further information about these covenants. A breach of the covenants or restrictions under the indenture, could result in a default under the notes. Such default, if not cured or waived, may allow the noteholders to accelerate the payment of the notes. In the event noteholders accelerate the repayment of the notes, we cannot assure you that we and our subsidiaries would have sufficient assets to repay such indebtedness.

The restrictions contained in the indenture could adversely affect our ability to:

•  finance our operations;

•  make needed capital expenditures;

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•  make strategic acquisitions or investments or enter into alliances;

•  withstand a future downturn in our business or the economy in general;

•  engage in business activities, including future opportunities, that may be in our interest; and

•  plan for or react to market conditions or otherwise execute our business strategies.

Our financial results, our substantial indebtedness and our credit ratings could adversely affect the availability and terms of our financing.

The Value of the Collateral Securing the Notes may not be Sufficient to Satisfy our Obligations Under the Notes.

The notes and the note guarantees are secured by first priority liens on the collateral described in this prospectus (subject to permitted liens), equally and ratably with any future first lien obligations permitted to be incurred pursuant to the indenture. No appraisal of the fair market value of the collateral securing the notes has been made in connection with the offering of the notes. The book value of the collateral should not be relied on as a measure of realizable value for such assets. The value of the collateral could be impaired in the future as a result of changing economic and market conditions, our failure to successfully implement our business strategy, competition and other factors. The collateral may include intangible or other illiquid assets that by their nature may not have a readily ascertainable market value or may not be readily saleable or, if saleable, there may be substantial delays in their liquidation. Additionally, certain of our assets are held by our foreign subsidiaries and will not be pledged to secure the notes.

In the event of a liquidation, foreclosure, bankruptcy, reorganization or similar proceeding, the value of the collateral and the amount that may be received upon a sale of collateral will depend upon many factors including, among others, the condition of the collateral and our industry, the ability to sell the collateral in an orderly sale, market and economic conditions, the availability of buyers and other factors. In addition, courts could limit recoverability with respect to the collateral if they deem a portion of the interest claim usurious in violation of applicable public policy. As a result, liquidating the collateral securing the notes may not produce proceeds in an amount sufficient to pay any amounts due on the notes. We cannot assure you of the value of the collateral or that the net proceeds received upon a liquidation, foreclosure, bankruptcy, reorganization or similar proceeding would be sufficient to repay all amounts due on the notes (and any payments in respect of prior liens).

The Collateral Securing the Notes may be Diluted Under Certain Circumstances.

The indenture governing the notes permits us to issue additional senior secured indebtedness, including priority lien indebtedness and further additional notes, subject to our compliance with the restrictive covenants in the indenture governing the notes at the time we issue such additional senior secured indebtedness. Any further additional notes issued under the indenture governing the notes would be guaranteed by the same guarantors and would have the same security interests, with the same priority, as currently securing the notes. As a result, the collateral securing the notes would be shared by any further additional notes we may issue under the applicable indenture, and an issuance of such additional notes would dilute the value of the collateral compared to the aggregate principal amount of notes issued. In addition, the indenture and our other security documents permit us and certain of our subsidiaries to incur additional pari passu secured indebtedness and subordinated lien indebtedness up to respective maximum pari passu secured indebtedness threshold amounts by issuing additional debt securities under one or more new indentures or by borrowing additional amounts under new credit facilities. Any additional pari passu secured indebtedness or subordinated lien indebtedness secured by the collateral would dilute the value of the noteholders’ rights to the collateral. The proceeds from the sale of all such collateral may not be sufficient to satisfy the amounts outstanding under the notes and all other indebtedness and obligations secured by such liens.

The terms of the indenture also permit us to incur other permitted liens on the collateral, whether arising on or after the date the notes are issued. The existence of any permitted liens could adversely affect the value of the collateral securing the notes and the note guarantees as well as the ability to realize or foreclose on

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such collateral. To the extent we incur any permitted liens, the liens of the noteholders may not be first priority.

If such proceeds were not sufficient to repay amounts outstanding under the notes, then noteholders (to the extent not repaid from the proceeds of the sale of the collateral) would only have an unsecured claim against our remaining assets.

The Notes and the Note Guarantees will be Structurally Subordinated to Indebtedness and other Liabilities of our Non-Guarantor Subsidiaries.

All of our domestic subsidiaries will guarantee the notes but none of our foreign subsidiaries will guarantee the notes. The notes and the note guarantees will be structurally subordinated to the indebtedness and other liabilities of our non-guarantor subsidiaries, and noteholders will not have any claim as a creditor against any such non-guarantor subsidiary. In addition, subject to certain limitations, the indenture governing the notes will permit our non-guarantor subsidiaries to incur additional indebtedness. In the event of a liquidation, foreclosure, bankruptcy, reorganization or similar proceeding of any non-guarantor subsidiary, holders of their indebtedness and their trade creditors will generally be entitled to payment of their claims from the assets of those entities before any assets are made available for distribution to us.

Rights of Noteholders in the Collateral may be Adversely Affected by the Failure to Perfect Security Interests in Collateral.

Applicable law requires that a security interest in certain tangible and intangible assets can only be properly perfected and its priority retained through certain actions undertaken by the secured party. The liens on the collateral may not be perfected with respect to the notes and the note guarantees if the collateral agent is not able to or does not take the actions necessary to perfect any such liens. In addition, applicable law requires that certain property and rights acquired after the grant of a general security interest can only be perfected at the time such property and rights are acquired and identified. There can be no assurance that the collateral agent will monitor, or that we will inform the collateral agent of, the future acquisition of property and rights that constitute collateral, and that the necessary action will be taken to properly perfect the security interest in such after-acquired collateral. The collateral agent has no obligation to monitor the acquisition of additional property or rights that constitute collateral or the perfection of any security interest therein. Such failure may result in the loss of the security interest in the collateral or the priority of the security interest in favor of the notes and the note guarantees against third parties.

Additionally, the indenture and the security documents entered into in connection with the notes do not require us to take a number of actions that might improve the perfection or priority of the liens of the collateral agent in the collateral. With limited exceptions, such actions will be limited to (i) the filing of UCC-1 financing statements in the jurisdiction of incorporation of us and the guarantors, (ii) the granting of mortgages over owned real properties to the extent described under “Description of the Exchange Notes — Collateral and Security,” (iii) the delivery of stock certificates of domestic and up to 65% of first-tier foreign subsidiaries, (iv) the entry into control agreements over certain deposit accounts and securities accounts, (v) the filing of a notice with the U.S. Patent and Trademark Office of the U.S. Copyright Office, and (vi) the delivery of debt instruments in favor of us or the guarantors. To the extent that the security interests created by the security documents with respect to any collateral are not perfected, the collateral agent’s rights will be equal to the rights of general unsecured creditors in the event of a liquidation, foreclosure, bankruptcy, reorganization or similar proceeding.

There are Certain Categories of Property that are Excluded from the Collateral.

The collateral securing the notes and the note guarantees excludes certain assets, generally as a result of applicable laws, or the terms of existing agreements. Property not included in the collateral will include:

•  rights in any property if the grant of a security interest in such property is prohibited by any law, treaty, rule or regulation or determination of an arbitrator or a court or other governmental authority or

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constitutes a breach or default under or results in the termination of, or requires any consent not obtained under, any lease, license or agreement;

•  property and assets in which a lien may not be granted without governmental approval or consent;

•  any U.S. Trademark applications filed on the basis of our or any guarantor’s intent-to-use such mark if the granting of a security interest in such application would result in the invalidation of such application;

•  property and assets owned by us or any guarantor which are located outside of the U.S. to the extent a lien on such property and assets cannot be perfected by the filing of UCC financing statements in our jurisdictions of organization or that of such Guarantor;

•  any capital stock of any first-tier foreign subsidiary in excess of 65% of the capital stock of such foreign subsidiary and any capital stock of any direct or indirect subsidiaries of a foreign subsidiary;

•  leasehold interests in real property;

•  motor vehicles and other assets in which a security interest may be perfected only through compliance with a certificate of title or similar statute;

•  certain other items agreed by the parties and as more fully set forth in the security documents;

•  interests in any owned real property with values of $1.0 million or less; and

•  proceeds and products of any and all of the foregoing excluded property and assets described above only to the extent that such proceeds and products would constitute property or assets of the type described above.

Rights of Noteholders in the Collateral may be Adversely Affected by Bankruptcy Proceedings.

The right of the collateral agent to repossess and dispose of the collateral upon the occurrence of an event of default under the indenture is likely to be significantly impaired by applicable bankruptcy law if a bankruptcy case were to be commenced by or against us or any guarantor before, or possibly after, the collateral agent repossessed and disposed of the collateral. Upon the commencement of a case under the bankruptcy code, a secured creditor such as the collateral agent is prohibited from repossessing its security from a debtor in a bankruptcy case, or from disposing of security repossessed from such debtor, without bankruptcy court approval, which may not be given. Moreover, the bankruptcy code permits the debtor to continue to retain and use collateral even though the debtor is in default under the applicable debt instruments, provided that the secured creditor is given “adequate protection.” The meaning of the term “adequate protection” may vary according to circumstances, but it is intended in general to protect the value of the secured creditor’s interest in the collateral as of the commencement of the bankruptcy case and may include cash payments or the granting of additional security if and at such times as the bankruptcy court in its discretion determines that the value of the secured creditor’s interest in the collateral is declining during the pendency of the bankruptcy case. A bankruptcy court may determine that a secured creditor may not require compensation for a diminution in the value of its collateral if the value of the collateral exceeds the debt it secures. In view of the broad discretionary power of a bankruptcy court, it is impossible to predict how long payments under the notes could be delayed following commencement of a bankruptcy case; whether or when the collateral agent could repossess or dispose of the collateral; or whether or to what extent noteholders would be compensated for any delay in payment or loss of value of the collateral through the requirement of “adequate protection.”

Any disposition of the collateral during a bankruptcy case would also require permission from the bankruptcy court. Furthermore, in the event a bankruptcy court determines the value of the collateral is not sufficient to repay all amounts due on the notes, the noteholders would hold a secured claim only to the extent of the value of the collateral to which the noteholders are entitled and unsecured claims with respect to such shortfall. The bankruptcy code only permits the payment and accrual of post-petition interest, costs and attorneys’ fees to a secured creditor during a debtor’s bankruptcy case to the extent the value of its collateral

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is determined by the bankruptcy court to exceed the aggregate outstanding principal amount of the obligations secured by the collateral.

A Court could Void our Subsidiaries’ Guarantees of the Notes Under Fraudulent Transfer Laws.

Although the note guarantees provide you with a direct claim against the assets of the subsidiary guarantors, under the federal bankruptcy laws and comparable provisions of state fraudulent transfer laws, or bankruptcy laws in other applicable jurisdictions, a note guarantee could be voided, or claims with respect to a note guarantee could be subordinated to all other debts of that guarantor. In addition, a bankruptcy court could void (i.e., cancel) any payments by that guarantor pursuant to its note guarantee and require those payments to be returned to the guarantor or to a fund for the benefit of the other creditors of the guarantor.

The bankruptcy court might take these actions if it found, among other things, that when a subsidiary guarantor executed its note guarantee (or, in some jurisdictions, when it became obligated to make payments under its note guarantee):

•  such subsidiary guarantor received less than reasonably equivalent value or fair consideration for the incurrence of its note guarantee; and

•  such subsidiary guarantor:

•  was (or was rendered) insolvent by the incurrence of the note guarantee;

•  was engaged or about to engage in a business or transaction for which its assets constituted unreasonably small capital to carry on its business;

•  intended to incur, or believed that it would incur, obligations beyond its ability to pay as those obligations matured; or

•  was a defendant in an action for money damages, or had a judgment for money damages docketed against it and, in either case, after final judgment, the judgment was unsatisfied.

A bankruptcy court would likely find that a subsidiary guarantor received less than fair consideration or reasonably equivalent value for its note guarantee to the extent that it did not receive any direct or indirect benefits from the issuance of the notes. A bankruptcy court could also void a note guarantee if it found that the subsidiary issued its note guarantee with actual intent to hinder, delay, or defraud creditors.

Although courts in different jurisdictions measure solvency differently, in general, an entity would be deemed insolvent if the sum of its debts, including contingent and unliquidated debts, exceeds the fair value of its assets, or if the present fair salable value of its assets is less than the amount that would be required to pay the expected liability on its debts, including contingent and unliquidated debts, as they become due.

If a court voided a note guarantee, it could require that noteholders return any amounts previously paid under such note guarantee. If any note guarantee were voided, noteholders would retain their rights against us and any other subsidiary guarantors, although there is no assurance that those entities’ assets would be sufficient to pay the notes in full.

Any Future Pledge of Collateral Might be Avoidable in Bankruptcy.

Any future pledge of collateral in favor of the collateral agent, including pursuant to security documents delivered after the date of the indenture governing the notes, might be avoidable by the pledgor (as debtor in possession) or by its trustee in bankruptcy if certain events or circumstances exist or occur, including, among others, if the pledgor is insolvent at the time of the pledge, the pledge permits the noteholders to receive a greater recovery than if the pledge had not been given and a bankruptcy proceeding in respect of the pledgor is commenced within 90 days following the pledge, or, in certain circumstances, a longer period.

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The Collateral is Subject to Casualty Risks.

The indenture governing the notes and the security documents requires us and the guarantors to maintain adequate insurance or otherwise insure against risks to the extent customary with companies in the same or similar business operating in the same or similar locations. There are, however, certain losses, including losses resulting from terrorist acts, that may be either uninsurable or not economically insurable, in whole or in part. As a result, we cannot assure you that the insurance proceeds will compensate us fully for our losses. If there is a total or partial loss of any of the collateral securing the notes, we cannot assure you that any insurance proceeds received by us will be sufficient to satisfy all the secured obligations, including the notes.

There are Circumstances other than Repayment or Discharge of the Notes Under which the Collateral Securing the Notes will be Released Automatically, without Consent of the Trustee or Noteholders.

Under various circumstances, collateral securing the notes will be released automatically, including:

•  with respect to collateral owned by a guarantor, upon the release of such guarantor from its note guarantee;

•  upon a disposition of such collateral in a transaction not prohibited under the indenture;

•  with respect to any particular item of collateral, assuming the notes do not constitute the largest class of outstanding pari passu secured obligations at such time, upon release by the authorized representative for the largest class of outstanding pari passu secured obligations at such time of the liens on such item of collateral and the concurrent release of the liens on such item securing any other pari passu secured obligations; or

•  if such property or other asset is or becomes an excluded asset pursuant to the security documents.

The indenture governing the notes permits us to designate one or more of our restricted subsidiaries that is a guarantor as an unrestricted subsidiary. If we designate a guarantor that is a subsidiary as an unrestricted subsidiary for purposes of the indenture, all of the liens on any collateral owned by such subsidiary or any of its subsidiaries, and any guarantees of the notes by such subsidiary or any of its subsidiaries, will be released under the indenture. Designation of an unrestricted subsidiary will reduce the aggregate value of the collateral securing the notes to the extent that liens on the assets of the unrestricted subsidiary and its subsidiaries are released. In addition, the creditors of the unrestricted subsidiary and its subsidiaries will have a senior claim on the assets of such unrestricted subsidiary and its subsidiaries.

Any of these events will reduce the aggregate value of the collateral securing the notes.

We will in Most Cases have Control over the Collateral, and the Sale of Particular Assets by us could Reduce the Pool of Assets Securing the Notes and the Note Guarantees.

The security documents allow us to remain in possession of, retain exclusive control over, freely operate, and collect, invest and dispose of any income from, the collateral securing the notes and the note guarantees. So long as no default or event of default under the indenture would result therefrom, we may, among other things, without any release or consent by the collateral agent, conduct ordinary course activities with respect to collateral, such as selling, factoring, abandoning or otherwise disposing of collateral and making ordinary course cash payments (including repayments of indebtedness). To the extent that additional indebtedness and obligations are secured by the collateral, our control over the collateral may be diminished.

You may have Limited Rights to Enforce Remedies Under the Security Documents, and the Collateral may be Released without your Consent in Certain Circumstances.

If we issue additional pari passu secured indebtedness, subject to our compliance with the restrictive covenants in the indenture governing the notes at the time we issue such additional senior secured indebtedness, the collateral agent will enter into an intercreditor agreement with the collateral agent for the holders of such additional pari passu secured indebtedness. Under the terms of the intercreditor agreement, the collateral agent will pursue remedies and take other action related to the collateral, including the release

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thereof, pursuant to the direction of the authorized representative for the holders of the largest class of outstanding obligations secured by liens on the collateral, including the notes. There can be no assurance that the notes will always represent the largest class of obligations secured by liens on the collateral. Accordingly, noteholders may not always have the right to control the remedies and the taking of other actions related to the collateral. In addition, all collateral sold or otherwise disposed of in accordance with the terms of the documents governing the pari passu secured obligations will automatically be released from the lien securing the notes and the lien securing the other pari passu secured obligations. Accordingly, any such sale or other disposition in a transaction that does not violate the asset disposition covenant of the indenture governing the notes may result in a release of the collateral subject to such sale or disposition. See “Description of the Exchange Notes — Limitation on Asset Sales.” Under the intercreditor agreement, the collateral agent may not object following the filing of a bankruptcy petition to any debtor-in-possession financing or to the use of the shared collateral to secure that financing, subject to conditions and limited exceptions, if at such time the notes are not the largest class of outstanding obligations secured by liens on the collateral. After such a filing, the value of the collateral could materially depreciate, and the noteholders would be unable to raise an objection.

The Value of the Collateral Securing the Notes may not be Sufficient to Secure Post-Petition Interest.

In the event of a bankruptcy proceeding against us or any guarantor, the noteholders will be entitled to post-petition interest, costs and attorneys’ fees under the bankruptcy code to the extent the value of their security interest in the collateral (which would be determined after taking into consideration, among other things, any equal ranking or prior ranking lien claims in the collateral) is greater than their pre-bankruptcy claim. The noteholders that have a security interest in the collateral with a value equal to or less than their pre-bankruptcy claim will not be entitled to post-petition interest, costs and attorney’s fees under the bankruptcy code. The bankruptcy trustee, the debtor-in-possession or competing creditors could possibly assert that the fair market value of the collateral with respect to the notes on the date of the bankruptcy filing was less than the then-current principal amount of the notes. Upon a finding by a bankruptcy court that the notes are under collateralized, the claims in the bankruptcy proceeding with respect to the notes would be bifurcated between a secured claim and an unsecured claim, and the unsecured claim would not be entitled to the benefits of security in the collateral. No appraisal of the fair market value of the collateral securing the notes has been prepared in connection with the offering of the notes and, therefore, the value of the collateral agent’s interest in the collateral may not equal or exceed the principal amount of the notes. We cannot assure you that there will be sufficient collateral to satisfy our and the guarantors’ obligations under the notes.

We may not be Able to Fulfill our Repurchase Obligations with Respect to the Notes Upon a Change of Control or an Asset Sale.

If we experience certain change of control events, we are required by the indenture governing the notes to offer to repurchase all outstanding notes at a repurchase price equal to 101% of the principal amount of notes repurchased, plus accrued and unpaid interest and special interest, if any, to the applicable repurchase date. In addition, under certain circumstances, if we sell assets and fail to apply the net proceeds therefrom as provided in the indenture, we must offer to repurchase the notes at a repurchase price equal to 100% of the principal amount of the notes repurchased, plus accrued and unpaid interest and special interest, if any, to the applicable repurchase date. The instruments governing our future indebtedness may also provide that certain change of control events or asset sales will constitute events of default thereunder. Such defaults could result in amounts outstanding under such other indebtedness becoming immediately due and payable.

If a change of control event or an asset sale were to occur, we cannot assure you that we would have sufficient funds to repay any notes that we would be required to offer to purchase or that would become immediately due and payable as a result of such change of control event or asset sale. We may require additional financing from third parties to fund any such repurchases, and we cannot assure you that we would be able to obtain additional financing on satisfactory terms or at all. Our failure to repay noteholders who tender notes for repurchase following a change of control event could result in an event of default under the indenture governing the notes. Any future indebtedness to which we become a party may also prohibit us from purchasing notes. If a change of control event or an asset sale occurs at a time when we are prohibited from

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purchasing notes, we may have to either seek the consent of the applicable lenders to the purchase of notes or attempt to refinance the borrowings that contain such prohibition. Our failure to obtain such a consent or to refinance such borrowings may preclude us from purchasing tendered notes and trigger an event of default under the indenture governing the notes, which may, in turn, constitute a default under other indebtedness.

Noteholders may not be Able to Determine when a Change of Control Giving Rise to Mandatory Repurchase Rights has Occurred Following a Sale of “Substantially All” of our Assets and our Restricted Subsidiaries’ Assets.

The definition of change of control in the indenture governing the notes includes a phrase relating to the direct or indirect sale, transfer, conveyance or other disposition of “all or substantially all” of our assets and our restricted subsidiaries’ assets. There is no precise established definition of the phrase “substantially all” under applicable law. Accordingly, the ability of a noteholder to require us to repurchase notes as a result of a sale, transfer, conveyance, assignment or other disposition of less than all of our assets and our restricted subsidiaries’ assets to another individual, group or entity may be uncertain.

No Active Trading Market Exists for the Notes and, if an Active Trading Market for the Notes does not Develop, you may not be Able to Resell Them.

The notes are a new issue of securities for which there is currently no public market. We do not intend to file an application to have the notes listed on any securities exchange or included for quotation on any automated dealer quotation system. There is no established public trading market for the notes, and an active trading market may not develop. If no active trading market develops, you may not be able to resell your notes at their fair market value or at all. Future trading prices of the notes will depend on many factors, including, among other things, our ability to effect the exchange offer, prevailing interest rates, our financial condition and results of operations, the volume of noteholders and the market for similar securities. The initial purchaser has advised us that it intends to make a market in the notes, but it is not obligated to do so. The initial purchaser may discontinue any market making in the notes at any time, in its sole discretion.

In the past, the market for debt securities has been subject to disruptions that have caused substantial volatility in the prices of securities similar to the notes. We cannot assure you that the market, if any, for the notes will be free from similar disruptions or that any such disruptions may not adversely affect the prices at which noteholders may sell their notes.

If a Bankruptcy Petition were Filed by or Against us, Holders of Notes may Receive A Lesser Amount for their Claim than they would have been Entitled to Receive Under the Indenture Governing the Notes.

If a bankruptcy petition were filed by or against us under the U.S. Bankruptcy Code, the claim by any holder of the notes for the principal amount of the notes may be limited to an amount equal to the sum of:

•  the original issue price for the notes; and

•  that portion of the original issue discount that does not constitute “unmatured interest” for purposes of the U.S. Bankruptcy Code.

Any original issue discount that was not amortized as of the date of the bankruptcy filing would constitute unmatured interest. Accordingly, holders of the notes under these circumstances may receive a lesser amount than they would be entitled to receive under the terms of the indenture governing the notes, even if sufficient funds are available.

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Risks Related to our Recently Completed Acquisition of OIS

We may be unable to Integrate OIS’ Operations Successfully or to Achieve Expected Cost Savings and Unanticipated Costs Relating to the OIS Acquisition could Reduce our Future Earnings Per Share.

On August 4, 2011, we consummated our acquisition of OIS. Our earnings, financial condition and prospects after the acquisition of OIS will depend in part on our ability to integrate the operations and management of OIS and to continue to implement OIS’ business plan. Among the issues that we could face in such integration are:

•  unexpected problems with operations, personnel, technology or credit;

•  loss of customers and employees of OIS;

•  potential difficulty in working with OIS’ employees and customers;

•  the assimilation of OIS’ operations, sites and personnel; and

•  instituting and maintaining uniform standards, controls, procedures and policies.

Even if the integration of OIS is successful, it may not result in the realization of the full benefits of the synergies and growth opportunities that we currently expect or these benefits may not be achieved within the anticipated time frame. Any failure to timely realize these anticipated benefits could have a material adverse effect on our revenues, expenses and operating results.

Further, although we anticipate cost savings as a result of the acquisition, we may not be fully able to realize those savings. Any cost savings which are realized may be offset by losses in revenues or other charges to earnings.

We believe that we have reasonably estimated the likely costs of integrating the operations of OIS into our business and the incremental costs of operating as a combined company. However, it is possible that unexpected transaction costs or future operating expenses, as well as other types of unanticipated adverse developments, could have a material adverse effect on our results of operations and financial condition. If unexpected costs are incurred, the acquisition could have a dilutive effect on our earnings per share, meaning earnings per share could be less than if the acquisition had not been completed.

FORWARD-LOOKING STATEMENTS

This prospectus contains and incorporates by reference forward-looking statements regarding our anticipated financial condition, results of operations and business in the future, including expectations, beliefs, projections, future plans and strategies and assumptions concerning future results and events. These forward-looking statements generally may, but do not necessarily, include words such as “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates,” “may,” “will,” “should,” “could,” “predicts,” “potential,” “continues” or similar expressions. Forward-looking statements are not guarantees. They involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Our future results may differ materially from those expressed in these forward-looking statements. For a more detailed description of some of these risks and uncertainties and other factors you should consider before participating in the exchange offer, see “Risk Factors” in this prospectus.

These risks and uncertainties include, but are not limited to our ability to maintain the technological competitiveness of our current products, develop new products, successfully market our products, respond to competitive developments, develop and maintain partnerships with providers of complementary technologies, manage our costs and the challenges that may come with growth of our business, and attract and retain qualified sales, technical and management employees. We are also affected by the growth and regulation of the medical technology industry, including the acceptance of enterprise-wide advanced visualization by hospitals, clinics, and universities, product clearances and approvals by the United States Food and Drug Administration and similar regulatory bodies outside the U.S., and reimbursement and regulatory practices by Medicare, Medicaid, and private third-party payer organizations. We are also affected by recent downturns in

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the U.S. and international economies and, as such, may be further impacted by the lack of credit available to our customers.

Except as required by applicable law, including the securities laws of the United States and the rules and regulations of the SEC, we do not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise to reflect actual results or changes in factors or assumptions affecting such forward-looking statements.

USE OF PROCEEDS

We will not receive any proceeds from the issuance of the exchange notes in the exchange offer. This exchange offer is intended to satisfy our obligations under the registration rights agreement, dated as of June 20, 2011, by and among us, the guarantors party thereto, and the initial purchaser of the old notes. In return for issuance of the exchange notes, we will receive in exchange old notes in like principal amount. We will retire or cancel all of the old notes tendered in the exchange offer.

On June 20, 2011, we issued and sold the old notes. We used the proceeds from the offering of the old notes to, among other things, (i) redeem and retire our Series A Non-Voting Preferred Stock that we issued in the AMICAS, Inc. (now Merge Healthcare Solutions Inc.) transaction, (ii) pay the consent payments in connection with the Solicitation required to permit the issuance of the old notes being registered for exchange hereby and (iii) pay related fees and expenses.

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CAPITALIZATION

The following table sets forth our capitalization as of June 30, 2011, which includes the following transactions:

•  the sale of the old notes and our receipt of approximately $50.8 million of net proceeds; and

•  the redemption and retirement of our Series A Non-Voting Preferred Stock, payment of consent payments in connection with the related Solicitation and payment of related fees and expenses.

This information should be read in conjunction with “Use of Proceeds” herein and the sections entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” incorporated by reference herein from our Annual Report on Form 10-K for the year ended December 31, 2010 and our Quarterly Reports on Form 10-Q for the periods ended March 31, 2011 and June 30, 2011, as well as the historical consolidated financial statements and related notes thereto of Merge Healthcare Incorporated included elsewhere and incorporated by reference in this prospectus.

Capitalization

	As of
	June 30, 2011
	(Unaudited)
	(In thousands)
Cash and cash equivalents	$	45,234
Total long-term debt, less current maturities		249,065
Total stockholders’ equity		55,356
Total capitalization	$	304,421

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SELECTED CONSOLIDATED FINANCIAL DATA

The following table sets forth selected historical consolidated financial data of Merge Healthcare Incorporated as of the dates and for the periods indicated. The selected historical consolidated financial data as of and for the years ended December 31, 2010, and December 31, 2009, and for the year ended December 31, 2008, have been derived from our audited historical consolidated financial statements incorporated by reference into this prospectus. The selected historical consolidated financial data as of December 31, 2008, and as of and for the years ended December 31, 2007, and December 31, 2006, have been derived from our audited historical consolidated financial statements not included or incorporated by reference into this prospectus. The selected historical consolidated financial data as of and for the six months ended June 30, 2011 and 2010 have been derived from our unaudited consolidated financial statements as of such dates and for such periods incorporated by reference into this prospectus; and which, in our opinion, reflect all adjustments, consisting of normal accruals, necessary for a fair presentation of the information as of the dates and for such periods presented. Our results of operations for the six months ended June 30, 2011 may not be indicative of results that may be expected for the full year.

The below selected historical consolidated financial data should be read in conjunction with the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” incorporated by reference herein form our Annual Report on Form 10-K for the year ended December 31, 2010 and our Quarterly Reports on Form 10-Q for the periods ended March 31, 2011 and June 30, 2011, as well as our consolidated financial statements and related notes thereto incorporated by reference into this prospectus.

	Six Months Ended June 30,						Years Ended December 31,
	2011			2010			2010(1)			2009(2)			2008			2007			2006
	(Unaudited)						(In thousands, except for share and per share data)
Statement of Operations Data:
Net sales	$	108,264		$	48,973		$	140,332		$	66,841		$	56,735		$	59,572		$	74,322
Operating income (loss)(3)		13,945			(13,778	)		(8,524	)		8,963			(21,697	)		(171,238	)		(252,087	)
Income (loss) before income taxes		(403	)		(18,007	)		(25,162	)		150			(23,743	)		(171,808	)		(249,473	)
Income tax expense (benefit)		2,871			106			(13,646	)		(135	)		(60	)		(240	)		9,450
Net income (loss)		(3,274	)		(18,113	)		(11,516	)		285			(23,683	)		(171,568	)		(258,923	)
Less: Preferred stock dividends		3,153			15,944			19,076			—			—			—			—
Net income (loss) available to common shareholders		(6,427	)		(34,057	)		(30,592	)		285			(23,683	)		(171,568	)		(258,923	)
Earnings (loss) per share:
Basic	$	(0.08	)	$	(0.44	)	$	(0.38	)	$	0.00		$	(0.51	)	$	(5.06	)	$	(7.68	)
Diluted		(0.08	)		(0.44	)		(0.38	)		0.00			(0.51	)		(5.06	)		(7.68	)
Weighted average shares outstanding:
Basic		84,277,343			77,461,669			80,231,427			60,910,268			46,717,546			33,913,379			33,701,735
Diluted		84,277,343			77,461,669			80,231,427			62,737,821			46,717,546			33,913,379			33,701,735

	June 30,				December 31,
	2011		2010		2010		2009		2008		2007		2006
	(Unaudited)				(In thousands)
Balance Sheet Data:
Working capital	$	45,964	$	27,074	$	28,792	$	18,231	$	8,254	$	878	$	27,101
Total assets		395,619		359,704		396,388		100,249		54,737		61,635		234,875
Long-term debt obligations		249,065		194,708		195,077		—		14,230		—		—
Shareholders’ equity		55,356		91,807		104,806		68,137		8,841		24,405		189,925

(1)	Includes the results of AMICAS, Inc. (now Merge Healthcare Solutions Inc.) from April 28, 2010, the date of the business combination.
(2)	Includes the results of etrials and Confirma from July 20, 2009 and September 1, 2009, the respective dates of the business combinations.
(3)	For the years ended December 31, 2007 and 2006, we incurred charges of $122.4 million and $214.1 million, respectively, related to the impairment of goodwill.

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RATIO OF EARNINGS TO FIXED CHARGES

The following table sets forth the ratio of earnings to fixed charges of Merge Healthcare Incorporated for the periods indicated:

	Six Months Ended June 30,						Year Ended December 31,
	2011			2010			2010			2009		2008			2007			2006
Ratio of Earnings to Fixed Charges		NA			NA			NA			1.0		NA			NA			NA
Dollar amount of deficiency (in thousands)	$	(403	)	$	(18,007	)	$	(25,162	)		NA	$	(23,743	)	$	(171,808	)	$	(249,473	)

For purposes of computing these ratios, earnings consists of pre-tax income from continuing operations plus fixed charges. Fixed charges consist of interest expense (including amortization of debt issuance premiums, discounts and issuance costs) and interest portion of rental expense. The ratio is calculated by dividing earnings by the sum of the fixed charges. The interest portion of rental expense is estimated at 23% of rental expense based on net present value analysis.

For further information on the Ratio of Earnings to Fixed Charges, see Exhibit 12.1, “Computation of Ratio of Earnings to Fixed Charges,” filed herewith.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Merrick RIS, LLC (“Merrick”) beneficially owns, as of August 5, 2011, 37.7% of our outstanding Common Stock (including 250,000 shares of Common Stock which may be acquired upon the exercise of stock options which are currently exercisable or exercisable within sixty (60) days by Michael W. Ferro, Jr.). Michael W. Ferro, Jr., the Company’s Chairman of the Board, and trusts for the benefit of Mr. Ferro’s family members beneficially own a majority of the equity interests in Merrick. Mr. Ferro also serves as the chairman and chief executive officer of Merrick. Accordingly, Mr. Ferro indirectly controls all of the shares of Common Stock owned by Merrick.

In January of 2009, we entered into a Consulting Agreement with Merrick which was effective as of January 1, 2009, had a one (1) year term and which allowed us to take advantage of certain consulting services offered by Merrick to us. These services included, but were not limited to, investor relations, financial analysis and strategic planning. Effective on January 1, 2010, we and Merrick entered into an amendment to extend the term of this Consulting Agreement through December 31, 2011, and modified the payment terms from a flat fee arrangement per quarter to a per transaction or success based arrangement. Our Audit Committee considered the amendment to the Consulting Agreement prior to its execution and approved its terms. The fees under the Consulting Agreement in 2010 were approximately $1,050,000.

In addition, as a result of the completion of the acquisition of AMICAS, Inc. (now Merge Healthcare Solutions Inc.), we paid a $1.0 million success fee to Merrick in April 2010.

Merrick also subscribed for and purchased 1.8 million shares of our Common Stock and 10,000 shares of our Series A Non-Voting Preferred Stock in the private placement that funded a portion of our acquisition of AMICAS, Inc. (now Merge Healthcare Solutions Inc.). These shares were purchased by Merrick at the same purchase price per share of Common Stock and per share of Series A Non-Voting Preferred Stock paid by the other investors in the private placement. The Series A Non-Voting Preferred Stock was redeemed on June 20, 2011 as described in “Prospectus Summary — Recent Developments — Consent Solicitation and Redemption of Series A Non-Voting Preferred Stock.”

On July 30, 2010, we entered into an Asset Purchase Agreement with Merrick Healthcare Solutions, LLC, a subsidiary of Merrick Ventures, pursuant to which we acquired substantially all of the assets related to the development and distribution of the Olivia Greets system. In consideration of this purchase, we issued 500,000 shares of our Common Stock to Merrick Healthcare Solutions, LLC subject to a twelve month lock up.

Merrick also purchased an aggregate principal amount of $5.0 million of the old notes at the same purchase price per old note as the other investors who purchased old notes in the offering of the old notes. Together with the $5.0 million of April 2010 notes that were previously purchased by Merrick on April 28, 2010, Merrick now holds $10.0 million aggregate principal of the notes.

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THE EXCHANGE OFFER

Purpose and Effect

Concurrently with the sale of the old notes on June 20, 2011, we and the guarantors entered into a registration rights agreement with the initial purchaser of the old notes, which requires us to file the registration statement under the Securities Act with respect to the exchange notes (the “exchange offer registration statement”) and, upon the effectiveness of the exchange offer registration statement, offer to the holders of old notes who are able to make certain representations the opportunity to exchange their old notes for a like principal amount of exchange notes. The exchange notes will be issued without a restrictive legend and may generally be reoffered and resold without registration under the Securities Act.

Pursuant to the registration rights agreement, we and the guarantors agreed, at our cost, for the benefit of the holders of the notes, to:

•  not later than 90 days after the date of original issuance of the notes, file the exchange offer registration statement with the SEC with respect to a registered offer to exchange the notes for new notes of Merge evidencing the same continuing indebtedness under, and having terms substantially identical in all material respects to, the old notes (except that the exchange notes will not contain terms with respect to transfer restrictions); and

•  use our commercially reasonable efforts to cause the exchange offer registration statement to be declared effective under the Securities Act not later than 180 days after the date of original issuance of the notes.

Upon the effectiveness of the exchange offer registration statement, we will promptly offer the exchange notes in exchange for surrender of the notes. We will keep the registered exchange offer open for not less than 20 business days (or longer if required by applicable law) after the date notice of the registered exchange offer is mailed to the holders of the notes. For each note surrendered to us pursuant to the registered exchange offer, the holder of such note will receive an exchange note having a principal amount equal to that of the surrendered note. Interest on each exchange note will accrue from the last interest payment date on which interest was paid on the note surrendered in exchange thereof or, if no interest has been paid on such note, from the date of its original issue.

Under existing SEC interpretations, the exchange notes would be freely transferable by holders of the notes other than our affiliates after the registered exchange offer without further registration under the Securities Act if the holder of the exchange notes represents that it is acquiring the exchange notes in the ordinary course of its business, that it has no arrangement or understanding with any person to participate in the distribution of the exchange notes and that it is not an affiliate of us, as such terms are interpreted by the SEC; provided that broker-dealers (“participating broker-dealers”) receiving exchange notes in the registered exchange offer will have a prospectus delivery requirement with respect to resales of such exchange notes. The SEC has taken the position that participating broker-dealers may fulfill their prospectus delivery requirements with respect to exchange notes (other than a resale of an unsold allotment from the original sale of the notes) with the prospectus contained in the exchange offer registration statement. Under the registration rights agreement, we will be required to allow participating broker-dealers and other persons, if any, with similar prospectus delivery requirements to use the prospectus contained in the exchange offer registration statement in connection with the resale of such exchange notes.

A holder of notes (other than certain specified holders) who wishes to exchange such notes for exchange notes in the registered exchange offer will be required to represent that any exchange notes to be received by it will be acquired in the ordinary course of its business and that at the time of the commencement of the registered exchange offer it has no arrangement or understanding with any person to participate in the distribution (within the meaning of the Securities Act) of the exchange notes and that it is not an “affiliate,” as defined in Rule 405 of the Securities Act, of us or if it is an affiliate, that it will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable.

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In the event that

(i) any change of law or applicable interpretations thereof by the staff of the SEC do not permit us to effect such a registered exchange offer,

(ii) for any other reason the registered exchange offer is not consummated within 210 days after the date of the original issuance of the notes,

(iii) the initial purchaser so requests with respect to notes not eligible to be exchanged for exchange notes in the registered exchange offer,

(iv) any holder of notes (other than the initial purchaser) is not eligible to participate in the registered exchange offer, or

(v) in the case of the initial purchaser participates in the registered exchange offer or otherwise acquires new securities under the registration rights agreement and, the initial purchaser does not receive freely tradable new securities (it being understood that (x) the requirement that the initial purchaser deliver the prospectus contained in the exchange offer registration statement containing the information required by Item 507 or 508 of Regulation S-K under the Act in connection with sales of exchange notes shall not result in such new securities being not “freely tradable” and (y) the requirement that a participating broker-dealer deliver the prospectus contained in the exchange offer registration statement in connection with sales of exchange notes shall not result in such exchange notes being not “freely tradable”),

we and the guarantors will, at our cost,

(a) as promptly as practicable (but in no event more than 60 days after so required or requested in accordance with the above), file a registration statement (the “shelf registration statement”) covering resales of the notes or the exchange notes, as the case may be,

(b) use our commercially reasonable efforts to cause the shelf registration statement to be declared effective under the Securities Act within 120 days after so required or requested and

(c) use our commercially reasonable efforts to keep the shelf registration statement effective until two years after its effective date.

We will, in the event a shelf registration statement is filed, among other things, provide to each holder for whom such shelf registration statement was filed copies of the shelf registration statement and prospectus which is a part of the shelf registration statement, notify each such holder when the shelf registration statement has become effective and take certain other actions as are required to permit unrestricted resales of the notes or the exchange notes, as the case may be. A holder selling such notes or exchange notes pursuant to the shelf registration statement generally would be required to be named as a selling security holder in the related prospectus and to deliver a prospectus to purchasers, will be subject to certain of the civil liability provisions under the Securities Act in connection with such sales and will be bound by the provisions of the registration rights agreement which are applicable to such holder (including certain indemnification obligations).

If

(a) either the exchange offer registration statement or the shelf registration statement has not been filed with the SEC as required by the registration rights agreement,

(b) either the exchange offer registration statement or the shelf registration statement has not been declared effective as required by the registration rights agreement, or

(c) after either the exchange offer registration statement or the shelf registration statement has been declared effective, such registration statement thereafter ceases to be effective or usable (subject to certain exceptions) in connection with resales of notes or exchange notes in accordance with and during the periods specified in the registration rights agreement, (each such event referred to in clauses (a) through (c), a “registration default”), we shall pay liquidated damages (“registration default damages”) to the holders of the notes and the exchange notes. Registration default damages shall accrue at a rate of 0.25%

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per annum for the first 60 days from and including the date of a registration default and at a rate of 0.50% thereafter.

The summary herein 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 the provisions of the registration rights agreement, a copy of which is available upon request to us.

Resale of Exchange Notes

Based on interpretations by the SEC set forth in no-action letters issued to third parties, we believe that you may resell or otherwise transfer exchange notes issued in the exchange offers without complying with the registration and prospectus delivery provisions of the Securities Act, if: you are not an “affiliate” of Merge Healthcare Incorporated or any guarantor within the meaning of Rule 405 under the Securities Act; you do not have an arrangement or understanding with any person to participate in a distribution of the exchange notes in violation of the provisions of the Securities Act; you are not engaged in, and do not intend to engage in, a distribution of the exchange notes; and you are acquiring the exchange notes in the ordinary course of your business.

If you are our affiliate or an affiliate of any guarantor, or are engaging in, or intend to engage in, or have any arrangement or understanding with any person to participate in, a distribution of the exchange notes, or are not acquiring the exchange notes in the ordinary course of your business: you cannot rely on the position of the SEC set forth in Morgan Stanley & Co. Incorporated (available June 5, 1991) and Exxon Capital Holdings Corp. (available May 13, 1988), as interpreted in the SEC’s letter to Shearman & Sterling, publicly available July 2, 1993, or similar no-action letters; and in the absence of an exception from the position stated immediately above, you must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale of the exchange notes.

This prospectus may be used for an offer to resell, resale or other transfer of exchange notes only as specifically set forth in this prospectus. With regard to broker-dealers, only broker-dealers that acquired the old notes as a result of market-making activities or other trading activities may participate in the exchange offer. Each broker-dealer that receives exchange notes for its own account in exchange for old notes, where such old notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of the exchange notes. Please read “Plan of Distribution” for more details regarding the transfer of exchange notes.

Terms of the Exchange Offer

Upon the terms and subject to the conditions set forth in this prospectus, we will accept any and all old notes validly tendered and not validly withdrawn prior to 5:00 p.m., Eastern time, on          , 2011, or such date and time to which we extend the offer. Notes may be tendered only in denominations of $2,000 and integral multiples of $1,000 in excess thereof.

The exchange notes will evidence the same debt as the old notes and will be issued under the terms of, and be entitled to the benefits of, the indenture relating to the old notes.

As of the date of this prospectus, $200 million in aggregate principal amount of notes were outstanding, and there was one registered holder, a nominee of the Depository Trust Company, or DTC. This prospectus is being sent to that registered holder and to others believed to have beneficial interests in the old notes. We intend to conduct the exchange offer in accordance with the applicable requirements of the Exchange Act and the rules and regulations of the SEC promulgated under the Exchange Act.

We will be deemed to have accepted for exchange validly tendered old notes when, as and if we have given oral or written notice of the acceptance to The Bank of New York Mellon Trust Company, N.A., the exchange agent. The exchange agent will act as agent for the tendering holders for the purpose of receiving the exchange notes from us and delivering the exchange notes to holders. If any tendered old notes are not accepted for exchange because of an invalid tender, the occurrence of certain other events set forth under the heading “— Conditions to the Exchange Offer” or otherwise, such unaccepted old notes will be returned,

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without expense, to the tendering holder of those old notes promptly after the expiration date unless the exchange offer is extended.

Holders who tender old notes in the exchange offer will not be required to pay brokerage commissions or fees or transfer taxes with respect to the exchange of old notes in the exchange offer. We will pay all charges and expenses applicable to the exchange offer, other than certain applicable taxes, underwriting discounts, if any, and commissions and transfer taxes, if any, which shall be borne by the holder. See “— Fees and Expenses.”

Expiration Date; Extensions; Amendments

The expiration date for the exchange offer shall be 5:00 p.m., Eastern time, on          , 2011, unless we, in our sole discretion, extend the exchange offer, in which case the expiration date shall be the latest date and time to which the exchange offer is extended. In order to extend the exchange offer, we will notify the exchange agent of any extension by oral or written notice, followed by notification by press release or other public announcement to the registered holders of the outstanding notes no later than 9:00 a.m., Eastern time, on the next business day after the previously scheduled expiration date. We reserve the right, in our sole discretion: to delay accepting for exchange any old notes (if we amend or extend the exchange offer), to extend the exchange offer or, if any of the conditions set forth under “— Conditions to the Exchange Offer” shall not have been satisfied, to terminate the exchange offer, by giving oral or written notice of that delay, extension or termination to the exchange agent, or to amend the terms of the exchange offer in any manner.

In the event that we make a fundamental change to the terms of the exchange offer, we will file a post-effective amendment to the registration statement of which this prospectus is a part.

Conditions to the Exchange Offer

Notwithstanding any other provision of the exchange offer, we will not be required to accept for exchange, or to issue exchange notes in exchange for, any old notes and may terminate or amend the exchange offer if at any time before the acceptance of those old notes for exchange or the exchange of the exchange notes for those old notes, we determine that the exchange offer violates applicable law or any applicable interpretation of the staff of the SEC.

In addition we will not be obligated to accept for exchange the old notes of any holder that has not made to us: the representations described under “— Purpose and Effect”; or any other representations as may be reasonably necessary under applicable SEC rules, regulations, or interpretations to make available to us an appropriate form of registration of the exchange notes under the Securities Act.

We expressly reserve the right at any time or at various times to extend the period of time during which the exchange offer is open. Consequently, we may delay acceptance of any old notes by giving oral or written notice of such extension to their holders. We will return any old notes that we do not accept for exchange for any reason without expense to their tendering holder promptly after the expiration or termination of the exchange offer.

We expressly reserve the right to amend or terminate the exchange offer and to reject for exchange any old notes not previously accepted for exchange, upon the occurrence of any of the conditions of the exchange offer specified above. We will give notice by press release or other public announcement of any extension, amendment, non-acceptance or termination to the holders of the old notes as promptly as practicable. In the case of any extension, such notice will be issued no later than 9:00 a.m., Eastern time, on the next business day after the previously scheduled expiration date.

The foregoing conditions are for our sole benefit and may be asserted by us regardless of the circumstances giving rise to any such condition or may be waived by us in whole or in part at any time and from time to time in our sole discretion. The failure by us at any time to exercise any of the foregoing rights shall not be deemed a waiver of any of those rights and each of those rights shall be deemed an ongoing right which may be asserted at any time and from time to time.

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In addition, we will not accept for exchange any old notes tendered, and no exchange notes will be issued in exchange for those old notes, if at such time any stop order shall be in effect with respect to the registration statement of which this prospectus constitutes a part or the qualification of the indenture under the Trust Indenture Act of 1939. In any of those events we are required to use every commercially reasonable effort to obtain the withdrawal of any stop order at the earliest practicable date.

Procedures for Tendering

To tender your old notes in the exchange offer, you must comply with either of the following: complete, sign and date the letter of transmittal, or a facsimile of the letter of transmittal, have the signature(s) on the letter of transmittal guaranteed if required by the letter of transmittal and mail or deliver such letter of transmittal or facsimile thereof to the exchange agent at the address set forth below under “— Exchange Agent” prior to the expiration date; or comply with DTC’s Automated Tender Offer Program, or ATOP, procedures described below.

In addition, either: the exchange agent must receive certificates for old notes along with the letter of transmittal prior to the expiration date; the exchange agent must receive a timely confirmation of book-entry transfer of old notes into the exchange agent’s account at DTC according to the procedures for book-entry transfer described below or a properly transmitted agent’s message prior to the expiration date; or you must comply with the guaranteed delivery procedures described below.

Your tender, if not withdrawn prior to the expiration date, constitutes an agreement between us and you upon the terms and subject to the conditions described in this prospectus and in the letter of transmittal.

The method of delivery of old notes, letter of transmittal, and all other required documents to the exchange agent is at your election and risk. We recommend that instead of delivery by mail, you use an overnight or hand delivery service, properly insured. In all cases, you should allow sufficient time to assure timely delivery to the exchange agent before the expiration date. You should not send letters of transmittal or certificates representing old notes to us. You may request that your broker, dealer, commercial bank, trust company or nominee effect the above transactions for you.

If you are a beneficial owner whose old notes are registered in the name of a broker, dealer, commercial bank, trust company, or other nominee and you wish to tender your old notes, you should promptly contact the registered holder and instruct the registered holder to tender on your behalf. If you wish to tender the old notes yourself, you must, prior to completing and executing the letter of transmittal and delivering your old notes, either: make appropriate arrangements to register ownership of the old notes in your name; or obtain a properly completed bond power from the registered holder of old notes.

The transfer of registered ownership may take considerable time and may not be able to be completed prior to the expiration date.

Signatures on the letter of transmittal or a notice of withdrawal, as the case may be, must be guaranteed by a member firm of a registered national securities exchange or of the Financial Industry Regulatory Authority, Inc., a commercial bank or trust company having an office or correspondent in the United States or another “eligible guarantor institution” within the meaning of Rule 17Ad-15 under the Exchange Act unless the old notes surrendered for exchange are tendered: by a registered holder of the old notes who has not completed the box entitled “Special Issuance Instructions” or “Special Delivery Instructions” on the letter of transmittal; or for the account of an eligible guarantor institution.

If the letter of transmittal is signed by a person other than the registered holder of any old notes listed on the old notes, such old notes must be endorsed or accompanied by a properly completed bond power. The bond power must be signed by the registered holder as the registered holder’s name appears on the old notes and an eligible guarantor institution must guarantee the signature on the bond power.

If the letter of transmittal or any certificates representing old notes, or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations, or others acting in a fiduciary

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or representative capacity, those persons should also indicate when signing and, unless waived by us, they should also submit evidence satisfactory to us of their authority to so act.

If you are a participant that has old notes which are credited to your DTC account by book-entry and which are held of record by DTC, you may tender your old notes by book-entry transfer as if you were the record holder. Because of this, reference herein to registered or record holders include DTC participants with old notes credited to their accounts. If you are not a DTC participant, you may tender your old notes by book-entry transfer by contacting your broker, dealer or other nominee or by opening an account with a DTC participant.

Participants in DTC’s ATOP program must electronically transmit their acceptance of the exchange by causing DTC to transfer the old notes to the exchange agent in accordance with DTC’s ATOP procedures for transfer. DTC will then send an agent’s message to the exchange agent. The term “agent’s message” means a message transmitted by DTC, received by the exchange agent and forming part of the book-entry confirmation, which states that:

•  DTC has received an express acknowledgment from a participant in its ATOP that is tendering old notes that are the subject of the book-entry confirmation; the participant has received and agrees to be bound by the terms and subject to the conditions set forth in this prospectus; and we may enforce the agreement against such participant.

Your tender, if not withdrawn before the expiration date, will constitute an agreement between you and us in accordance with the terms and subject to the conditions described in this prospectus.

We reserve the right in our sole discretion to purchase or make offers for any old notes that remain outstanding after the expiration date or, as set forth under “— Conditions to the Exchange Offer,” to terminate the exchange offer and, to the extent permitted by applicable law, purchase old notes in the open market, in privately negotiated transactions, or otherwise. The terms of any such purchases or offers could differ from the terms of the exchange offer.

Subject to and effective upon the acceptance for exchange and exchange of exchange notes, a tendering holder of old notes will be deemed to: have agreed to irrevocably sell, assign, transfer and exchange, to us all right, title and interest in, to and under all of the old notes tendered thereby; have represented and warranted that when such old notes are accepted for exchange by us, we will acquire good and marketable title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claims; and have irrevocably appointed the exchange agent the true and lawful agent and attorney-in-fact of the holder with respect to any tendered old notes, with full power of substitution to (1) deliver certificates representing such old notes, or transfer ownership of such old notes on the account books maintained by DTC (together, in any such case, with all accompanying evidences of transfer and authenticity), to us, (2) present and deliver such old notes for transfer on our books and (3) receive all benefits and otherwise exercise all rights and incidents of beneficial ownership with respect to such old notes, all in accordance with the terms of the exchange offer.

Each broker-dealer that receives exchange notes for its own account in exchange for old notes, where those old notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of those exchange notes. See “Plan of Distribution.”

Acceptance of Exchange Notes

In all cases, we will promptly issue exchange notes for old notes that we have accepted for exchange under the exchange offer only after the exchange agent timely receives: old notes or a timely book-entry confirmation of such old notes into the exchange agent’s account at the book-entry transfer facility; and a properly completed and duly executed letter of transmittal and all other required documents or a properly transmitted agent’s message.

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•  By tendering old notes pursuant to the exchange offer, you will represent to us that, among other things: you are not our affiliate or an affiliate of any guarantor within the meaning of Rule 405 under the Securities Act; you are acquiring the exchange notes in the ordinary course of your business; you do not have an arrangement or understanding with any person to participate in a distribution of the exchange notes; you are not engaging in or intend to engage in a distribution of the exchange notes; and if you are a broker that will receive exchange notes for your own account in exchange for old notes that were acquired as a result of market-making activities or other trading activities, that you will comply with the applicable provisions of the Securities Act (including, but not limited to, the prospectus delivery requirements thereunder).

The letter of transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act. See “Plan of Distribution.”

We will interpret the terms and conditions of the exchange offer, including the letter of transmittal and the instructions to the letter of transmittal, and will resolve all questions as to the validity, form, eligibility, including time of receipt, and acceptance of old notes tendered for exchange. Our determinations in this regard will be final and binding on all parties. We reserve the absolute right to reject any and all tenders of any particular old notes not properly tendered or to not accept any particular old notes if the acceptance might, in its or its counsel’s judgment, be unlawful. We also reserve the absolute right to waive any defects or irregularities as to any particular old notes prior to the expiration date.

Unless waived, any defects or irregularities in connection with tenders of old notes for exchange must be cured within such reasonable period of time as we determine. Neither we, the exchange agent, nor any other person will be under any duty to give notification of any defect or irregularity with respect to any tender of old notes for exchange, nor will any of them incur any liability for any failure to give notification. Any old notes received by the exchange agent that are not properly tendered and as to which the irregularities have not been cured or waived will be returned by the exchange agent to the tendering holder, unless otherwise provided in the letter of transmittal, promptly after the expiration date.

Return of Notes

If we do not accept any tendered old notes for any reason described in the terms and conditions of the exchange offer or if you withdraw or submit old notes for a greater principal amount than you desire to exchange, we will return the unaccepted, withdrawn or non-exchanged notes without expense to you as promptly as practicable.

Book-Entry Transfer

Promptly after the date of this prospectus, the exchange agent will establish an account with respect to the old notes at DTC, as the book-entry transfer facility, for purposes of the exchange offer. Any financial institution that is a participant in the book-entry transfer facility’s system may make book-entry delivery of the old notes by causing the book-entry transfer facility to transfer those old notes into the exchange agent’s account at the facility in accordance with the facility’s procedures for such transfer. To be timely, book-entry delivery of old notes requires receipt of a confirmation of a book-entry transfer, a “book-entry confirmation,” prior to the expiration date. In addition, although delivery of old notes may be effected through book-entry transfer into the exchange agent’s account at the book-entry transfer facility, the letter of transmittal or a manually signed facsimile thereof, together with any required signature guarantees and any other required documents, or an agent’s message in connection with a book-entry transfer, must, in any case, be delivered or transmitted to and received by the exchange agent at its address set forth on the cover page of the letter of transmittal prior to the expiration date to receive exchange notes for tendered old notes, or the guaranteed delivery procedure described below must be complied with. Tender will not be deemed made until such documents are received by the exchange agent. Delivery of documents to the book-entry transfer facility does not constitute delivery to the exchange agent.

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Holders of old notes who are unable to deliver confirmation of the book-entry tender of their old notes into the exchange agent’s account at the book-entry transfer facility or all other documents required by the letter of transmittal to the exchange agent on or prior to the expiration date must tender their old notes according to the guaranteed delivery procedures described below.

Guaranteed Delivery Procedures

If you wish to tender your old notes but your old notes are not immediately available or you cannot deliver your old notes, the letter of transmittal or any other required documents to the exchange agent or comply with DTC’s ATOP procedures in the case of old notes, prior to the expiration date, you may still tender if: the tender is made through an eligible guarantor institution; prior to the expiration date, the exchange agent receives from such eligible guarantor institution either a properly completed and duly executed notice of guaranteed delivery, by facsimile transmission, mail or hand delivery or a properly transmitted agent’s message and notice of guaranteed delivery, that (1) sets forth your name and address, the certificate number(s) of such old notes and the principal amount of old notes tendered; (2) states that the tender is being made thereby; and (3) guarantees that, within three New York Stock Exchange trading days after the expiration date, the letter of transmittal, or facsimile thereof, together with the old notes or a book-entry confirmation, and any other documents required by the letter of transmittal, will be deposited by the eligible guarantor institution with the exchange agent; and the exchange agent receives the properly completed and executed letter of transmittal or facsimile thereof, as well as certificate(s) representing all tendered old notes in proper form for transfer or a book-entry confirmation of transfer of the old notes into the exchange agent’s account at DTC all other documents required by the letter of transmittal within three New York Stock Exchange trading days after the expiration date.

Upon request, the exchange agent will send to you a notice of guaranteed delivery if you wish to tender your old notes according to the guaranteed delivery procedures.

Withdrawal Rights

Except as otherwise provided in this prospectus, you may withdraw your tender of old notes at any time prior to 5:00 p.m., Eastern time, on the expiration date.

For a withdrawal to be effective: the exchange agent must receive a written notice, which may be by facsimile or letter, of withdrawal at its address set forth below under “— Exchange Agent”; or you must comply with the DTC’s ATOP procedures.

Any notice of withdrawal must: specify the name of the person who tendered the old notes to be withdrawn; identify the old notes to be withdrawn, including the certificate numbers and principal amount of the old notes; and signed by the holder in the same manner as the original signature on the letter of transmittal by which such old notes are tendered (including any required signature guarantees).

If old notes have been tendered pursuant to the procedures for book-entry transfer described above, any notice of withdrawal must specify the name and number of the account at the book-entry transfer facility to be credited with the withdrawn old notes and otherwise comply with the procedures of the facility. We will determine all questions as to the validity, form and eligibility, including time of receipt of notices of withdrawal and our determination will be final and binding on all parties. Any old notes so withdrawn will be deemed not to have been validly tendered for exchange for purposes of the exchange offer. Any old notes that have been tendered for exchange but that are not exchanged for any reason will be returned to their holder, without cost to the holder, or, in the case of book-entry transfer, the old notes will be credited to an account at the book-entry transfer facility, promptly after withdrawal, rejection of tender or termination of the applicable exchange offer. Properly withdrawn old notes may be retendered by following the procedures described under “— Procedures for Tendering” above at any time on or prior to the expiration date.

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Exchange Agent

The Bank of New York Mellon Trust Company, N.A. has been appointed as exchange agent for the exchange offer. Questions, requests for assistance and requests for additional copies of this prospectus or should be directed to the exchange agent addressed as follows:

By Registered & Certified Mail: THE BANK OF NEW YORK MELLON Corporate Trust Operations Reorganization Unit 101 Barclay Street — 7 East New York, NY 10286 Attention: [          ]	By Regular Mail or Overnight Courier: THE BANK OF NEW YORK MELLON Corporate Trust Operations Reorganization Unit 101 Barclay Street — 7 East New York, NY 10286 Attention: [          ]
In Person by Hand Only: THE BANK OF NEW YORK MELLON Corporate Trust Operations Reorganization Unit 101 Barclay Street — 7 East New York, NY 10286 Attention: [          ]	By Facsimile (for Eligible Institutions only): (212) 298-1915
	For Information or Confirmation by Telephone: (212) [          ]

Fees And Expenses

We will not make any payments to brokers, dealers or others soliciting acceptances of the exchange offer. The principal solicitation is being made by mail; however, additional solicitations may be made in person or by telephone by our officers and employees. The estimated cash expenses to be incurred in connection with the exchange offer will be paid by us and will include fees and expenses of the exchange agent, accounting, legal, printing and related fees and expenses.

Transfer Taxes

We will pay all transfer taxes, if any, applicable to the transfer and exchange of old notes to us in the exchange offer. If transfer taxes are imposed for any other reason, the amount of those transfer taxes, whether imposed on the registered holder or any other persons, will be payable by the tendering holder.

DESCRIPTION OF THE EXCHANGE NOTES

On June 20, 2011, Merge Healthcare Incorporated (the “Company”), issued $52,000,000 of 11.75% Senior Secured Notes due 2015 (the “old notes”) under an Indenture, dated as of April 28, 2010, as supplemented by the First Supplemental Indenture dated June 14, 2011 and the Second Supplemental Indenture dated June 20, 2011, between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”). There are $200,000,000 in aggregate principal amount of 11.75% Senior Secured Notes due 2015 (the “April 2010 notes”) already outstanding under the Indenture. As a result, the term “Closing Date” as used herein refers to April 28, 2010, the date of original issuance of the April 2010 notes under the Indenture. As used in this “Description of the Exchange Notes,” except as otherwise specified, the term “Notes” means the April 2010 notes together with the old notes and the exchange notes offered in the exchange transaction that is being registered hereby (the “exchange notes”). All such Notes will be treated as a single class for all purposes under the Indenture. The old notes, however, were issued with a separate, restricted CUSIP which is expected to be switched to the same unrestricted CUSIP as the existing notes following completion of the exchange offer. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended, which is referred to in this prospectus as the Trust Indenture Act, or TIA.

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The following is a summary of the material provisions of the Indenture but does not restate the Indenture in its entirety. You can find the definitions of certain capitalized terms used in the following summary under the subheading “Definitions.” The definitions used in this “Description of the Exchange Notes” may differ from definitions used elsewhere in this prospectus. We urge you to read the Indenture because it, and not this description, defines your rights as holders of the Notes. A copy of the Indenture is available upon request from the Company. For purposes of this “Description of the Exchange Notes,” the term “Company” means Merge Healthcare Incorporated, a Delaware corporation, and its successors under the Indenture, in each case excluding its subsidiaries.

General

The Notes are secured, senior Indebtedness of the Company, limited to $252,000,000 aggregate principal amount, of which $52,000,000 were issued on June 20, 2011 and $200,000,000 were issued on April 28, 2010. The Notes will mature on May 1, 2015. The Notes will be issuable only in denominations of $2,000 and integral multiples of $1,000 in excess of $2,000. Subject to the covenants described below under “— Covenants” and applicable law, the Company may issue additional Notes (“Additional Notes”) under the Indenture. The Notes, any exchange notes issued as described under “The Exchange Offer,” and any Additional Notes would be treated as a single class for all purposes under the Indenture.

Each New Note will initially bear interest at the rate per annum shown on the cover page of this prospectus from the most recent interest payment date to which interest has been paid on the Notes. Interest on the old notes will be payable semiannually on May 1 and November 1, commencing on November 1, 2011. Interest will be paid to Holders of record at the close of business on the April 15 and October 15 immediately preceding the Interest Payment Date. Interest is computed on the basis of a 360-day year of twelve 30-day months. Interest on overdue principal and interest and Additional Interest, if any, will accrue at a rate that is 1% higher than the then applicable interest rate on the Notes.

The old notes were offered and sold to qualified institutional buyers in reliance on Rule 144A under the Securities Act. Rule 144A Notes initially will be represented by one or more Notes in registered global form without interest coupons. The Rule 144A global note will be deposited upon issuance with the Trustee as custodian for The Depository Trust Company, also referred to as DTC, and registered in the name of DTC or its nominee, in each case for credit to an account of a direct or indirect participant as described below. No service charge will be made for any registration of transfer or exchange of Notes, but the Company may require payment of a sum sufficient to cover any transfer tax or other similar governmental charge payable in connection therewith.

Ranking

The Notes are:

•  general senior obligations of the Company;

•  secured on a first-priority lien basis by the Collateral, subject to certain Permitted Liens;

•  equal in right of payment with all existing and future senior Indebtedness of the Company;

•  senior in right of payment to all existing and future subordinated Indebtedness of the Company;

•  “structurally subordinated” to all existing and future Indebtedness and other liabilities of the Company’s subsidiaries that are not Guarantors; and

•  guaranteed on a senior secured basis by each Guarantor.

Each Note Guarantee (as defined below) is:

•  a general senior obligation of each Guarantor;

•  secured on a first-priority lien basis by the Collateral, subject to certain Permitted Liens;

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•  senior in right of payment to all future obligations of such Guarantor that are, by their terms, expressly subordinated in right of payment to such Note Guarantee; and

•  pari passu in right of payment with all existing and future unsecured obligations of such Guarantor that are not so subordinated.

The Notes are effectively subordinated to all existing and future obligations, including Indebtedness, of any Subsidiaries of the Company that do not guarantee the Notes, including any Unrestricted Subsidiaries. Claims of creditors of these Subsidiaries, including trade creditors, will generally have priority as to the assets of these Subsidiaries over the claims of the Company and the holders of the Company’s Indebtedness, including the Notes.

As of June 30, 2011, after giving effect to the offering of the old notes, the Company would have had $252.0 million aggregate principal amount of senior secured Indebtedness outstanding.

As of the date of the Indenture, all of our Subsidiaries were “Restricted Subsidiaries.” However, subject to compliance with the requirements noted in the definition of “Unrestricted Subsidiary,” we will be permitted to designate Subsidiaries as “Unrestricted Subsidiaries.” Our Unrestricted Subsidiaries will not be subject to the restrictive covenants in the Indenture. Our Unrestricted Subsidiaries will not guarantee the Notes.

Note Guarantees

The Company’s obligations under the Notes and the Indenture will be jointly and severally guaranteed (the “Note Guarantees”) by each of the Company’s current and future Domestic Restricted Subsidiaries.

Not all of the Company’s Subsidiaries will guarantee the Notes. Unrestricted Subsidiaries and Foreign Restricted Subsidiaries will not be Guarantors. In the event of a bankruptcy, liquidation or reorganization of any of these non-Guarantor Subsidiaries, these non-Guarantor Subsidiaries will pay the holders of their debts and their trade creditors before they will be able to distribute any of their assets to the holders of the Notes. For the quarter ended March 31, 2011, the Company’s non-Guarantor Subsidiaries represented approximately 10.0% of its revenues and had net income of approximately $0.3 million compared to the Company’s consolidated net loss of approximately $1.6 million for the same period. In addition, as of March 31, 2011, the Company’s non-Guarantor Subsidiaries held approximately 7.8% of its consolidated assets and had approximately $32.3 million of liabilities (including trade payables), to which the Notes and Note Guarantees would have been structurally subordinated.

The obligations of each Guarantor under its Note Guarantee will be limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such Guarantor and after giving effect to any collections from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under its Note Guarantee or pursuant to its contribution obligations under the Indenture, result in the obligations of such Guarantor under its Note Guarantee not constituting a fraudulent conveyance or fraudulent transfer under federal or state law. Nonetheless, in the event of the bankruptcy or financial difficulty of a Guarantor, such Guarantor’s obligations under its Note Guarantee may be subject to review and avoidance under state and federal fraudulent transfer laws. Among other things, such obligations may be avoided if a court concludes that such obligations were incurred for less than a reasonably equivalent value or fair consideration at a time when the Guarantor was insolvent, was rendered insolvent, or was left with inadequate capital to conduct its business. A court would likely conclude that a Guarantor did not receive reasonably equivalent value or fair consideration to the extent that the aggregate amount of its liability on its Note Guarantee exceeds the economic benefits it receives from the issuance of the Note Guarantee. See “Risk Factors — Risks Related to the Notes — A court could void our subsidiaries’ guarantees of the notes under fraudulent transfer laws.”

Each Guarantor that makes a payment for distribution under its Note Guarantee is entitled to a contribution from each other Guarantor in a pro rata amount based on adjusted net assets of each Guarantor.

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A Subsidiary Guarantor shall be released from its obligations under its Note Guarantee and its obligations under the Indenture and the Registration Rights Agreement:

(1) in connection with any sale or other disposition of all or substantially all of the assets of that Guarantor (including by way of merger or consolidation) to a Person that is not (either before or after giving effect to such transaction) the Company or a Restricted Subsidiary of the Company, if the sale or other disposition does not violate the covenants set forth below under “Repurchase at the Option of Holders — Asset Sales;”

(2) in connection with any sale or other disposition of the Capital Stock of that Guarantor (including by way of merger or consolidation) to a Person that is not (either before or after giving effect to such transaction) the Company or a Restricted Subsidiary of the Company, such that, immediately after giving effect to such transaction, such Guarantor would no longer constitute a Subsidiary of the Company, if the sale or other disposition does not violate the covenants set forth below under “Repurchase at the Option of Holders — Asset Sales;”

(3) if the Company designates any Restricted Subsidiary that is a Guarantor to be an Unrestricted Subsidiary in accordance with the applicable provisions of the Indenture; or

(4) upon legal defeasance or satisfaction and discharge of the Indenture as provided below under the captions “Legal Defeasance and Covenant Defeasance” and “Satisfaction and Discharge.”

Collateral and Security

Collateral Generally

The Notes, the Note Guarantees, and all other Permitted Pari Passu Obligations will be secured equally and ratably by continuing first priority security interests (subject to Permitted Liens) in substantially all of the tangible and intangible assets of the Company and the Guarantors, whether now owned or hereafter acquired or arising, and wherever located, including, but not limited to, all existing and future Capital Stock and intercompany debt of any Domestic Subsidiary owned directly by the Company or any Guarantor and all existing and future Capital Stock of any first-tier Foreign Subsidiary owned directly by the Company or any Guarantor (limited in the case of any such Foreign Subsidiaries, to 65% of the Capital Stock of such Foreign Subsidiaries), accounts receivable, deposit accounts, chattel paper, inventory, equipment, investment property, intellectual property, interests in commercial tort claims, other general intangibles and certain owned real property, and all proceeds of the foregoing, subject to the exceptions discussed in the succeeding paragraph (collectively, the “Collateral”).

The Collateral will exclude certain items of property, including without limitation:

•  rights in any property to the extent that and only for as long as the grant of a security interest in such property (i) is prohibited by any law, treaty, rule or regulation or determination of an arbitrator or a court or other governmental authority applicable to or binding upon the Company or any Guarantor, or (ii) constitutes a breach or default under or results in the termination of, or requires any consent not obtained under, any lease, license or agreement (other than to the extent that the provisions of any such lease, license or agreement are ineffective under applicable law or would be ineffective under Sections 9-406, 9-407, 9-408 or 9-409 of the Uniform Commercial Code of any relevant jurisdiction to prevent the attachment of the security interest granted under the Security Documents);

•  property and assets owned by the Company or any Guarantor in which a Lien may not be granted without governmental approval or consent (but only for so long as the Company or the applicable Guarantor has not obtained such approval or consents); and

•  any United States Trademark applications filed on the basis of the Company’s or any Guarantor’s intent-to-use such mark, but only if and to the extent that the granting of a security interest in such application would result in the invalidation of such application, provided that, upon the submission of evidence of use of such Trademark in interstate commerce is submitted to the United States Patent and Trademark Office, such Trademark application shall automatically be included in the Collateral;

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•  any Capital Stock of any first-tier Foreign Restricted Subsidiary directly owned by the Company or any Guarantor in excess of 65% of the Capital Stock of such Foreign Restricted Subsidiary;

•  property and assets owned by the Company or any Guarantor which are located outside of the United States to the extent a lien on such property and assets cannot be perfected by the filing of UCC financing statements in the jurisdictions of organization of the Company or such Guarantor;

•  any Capital Stock of any direct or indirect Subsidiaries of any Foreign Subsidiary;

•  any leasehold interest in real property;

•  motor vehicles and other assets in which a security interest may be perfected only through compliance with a certificate of title or similar statute;

•  certain other items agreed by the parties and as more fully set forth in the Security Documents; and

•  proceeds and products of any and all of the foregoing excluded property and assets described above only to the extent that such proceeds and products would constitute property or assets of the type described above.

Mortgages and other perfection steps will not be required in respect of any fee interest in any Real Property having a value of $1.0 million or less.

As of the date of the issuance of the old notes, there have been no grants of mortgages or other perfection steps taken with respect to Real Property, because none of the Real Property interests of the Company or the Guarantors meets the aforementioned $1.0 million threshold.

Security Documents Generally

On or prior to the Closing Date, the Company and the Guarantors entered into certain Security Documents (including, without limitation, the Guarantee and Collateral Agreement) with the Collateral Agent, which documents provided for the grant of security interests in the Collateral in favor of the Collateral Agent, for the benefit of the Trustee and the Holders of the Notes, including the old notes.

The Company will, and will cause each of the Guarantors to, do or cause to be done all acts and things which may be required, or which the Collateral Agent from time to time may reasonably request, to assure and confirm that the Collateral Agent holds, for the benefit of the Trustee and the Holders of the Notes, duly created, enforceable and perfected Liens upon the Collateral as contemplated by the Indenture and the Security Documents.

The Company and the Guarantors will be able to incur additional Indebtedness in the future which could share in the Collateral. Any such Indebtedness may limit the recovery from the realization of the value of such Collateral available to satisfy the Holders of the Notes. A representative for the lenders with respect to such Indebtedness will be required to enter into the Intercreditor Agreement as Pari Passu Secured Parties. No Collateral will secure any other Indebtedness unless such Collateral also secures the Note Obligations. The amount of all such additional Indebtedness will be limited by the covenants disclosed under “Certain Covenants — Limitation on Indebtedness” and “Certain Covenants — Limitation on Liens.” Under certain circumstances the amount of such additional Indebtedness could be significant.

No appraisals of any Collateral have been prepared in connection with the offering of the old notes. The value of the Collateral at any time is subject to fluctuation based on factors that include, among others, the condition of the healthcare information industry, the ability to sell the Collateral in an orderly sale, general economic conditions, the availability of suitable buyers and similar factors. By its nature, some or all of the Collateral may be illiquid and may have no readily ascertainable market value. We cannot assure you that the fair market value of the Collateral as of the date of this prospectus exceeds the principal amount of the Indebtedness secured thereby. The value of the assets pledged as Collateral for obligations under the Indenture could be impaired in the future as a result of changing economic conditions, our failure to implement our business strategy, competition or other future trends.

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We cannot assure you that, in the event of a foreclosure, the proceeds from the sale of the portion of the Collateral allocated or allocable to the repayment of the obligations under the Indenture would be sufficient to satisfy the amounts outstanding under the Notes. If such proceeds were not sufficient to repay amounts outstanding under the Notes, the holders of the Notes (to the extent not repaid from the proceeds of the sale of the Collateral) would have only an unsecured, general claim against us and our Guarantors’ remaining assets, which claim would rank equal in priority to unsecured general Indebtedness. In the event that a bankruptcy case is commenced by or against us, if the value of the Collateral is less than the amount of principal and accrued and unpaid interest on the Notes and all other senior secured obligations, interest may cease to accrue on the Notes from and after the date the bankruptcy petition is filed.

After-Acquired Property

Promptly following the acquisition by the Company or any Guarantor of any After-Acquired Property (but subject to the applicable limitations in the Security Documents), the Company or such Guarantor will execute and deliver such security agreement supplements, mortgages, deeds of trust, security instruments, financing statements, title insurance, surveys and certificates and opinions of counsel as are reasonably necessary to vest in the Collateral Agent a perfected security interest or other Liens in or on such After-Acquired Property and to have such After-Acquired Property added to the Collateral, and thereupon all provisions of the Indenture relating to the Collateral will be deemed to relate to such After-Acquired Property to the same extent and with the same force and effect.

Intercreditor Agreement

If additional secured Indebtedness is issued in the future, the Company, the Guarantors, the Collateral Agent, and the Authorized Representative for the holders and the lenders of such additional secured debt (the “Pari Passu Debt Collateral Agent”) will enter into an Intercreditor Agreement (as the same may be amended from time to time, the “Intercreditor Agreement”), with respect to the Collateral, which Intercreditor Agreement may be amended from time to time without the consent of the Holders of the Notes to add additional lenders holding Pari Passu Obligations permitted to be incurred under the Indenture, the Intercreditor Agreement and any Pari Passu Agreements then in effect.

Collateral Agent

By accepting the Notes, each Holder will be deemed to have irrevocably appointed The Bank of New York Mellon Trust Company, N.A. as the Collateral Agent, to act as its agent under the Intercreditor Agreement, the Guarantee and Collateral Agreement and the other Security Documents, and to have irrevocably authorized the Collateral Agent to perform the duties and exercise the rights powers and discretions that are specifically given to it under the Indenture, the Intercreditor Agreement, the Guarantee and Collateral Agreement and the other Security Documents, together with any other incidental rights power and discretion. Under the terms of the Indenture, the Collateral Agent may resign on 30 days prior written notice, and the Collateral Agent may also be removed for cause and replaced by a replacement collateral agent selected by the Trustee, in consultation with the Company.

The Collateral Agent holds (directly or through co-trustees, co-agents, agents or sub agents), and will be entitled to enforce, all Liens on the Collateral created by the Security Documents in accordance with the following.

Enforcement of Security Interests

Under the Intercreditor Agreement, the Applicable Authorized Representative has the right, under certain circumstances, to direct the Collateral Agent and each Pari Passu Debt Collateral Agent to foreclose or take other actions with respect to the Collateral, and no other party to the Intercreditor Agreement will have the right to direct any action with respect to the Collateral. Except as described below, the Applicable Authorized Representative will be the Authorized Representative of the Series of Pari Passu Obligations that constitutes the largest outstanding principal amount of all then-outstanding Pari Passu Obligations (the “Controlling

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Authorized Representative”). Upon the occurrence of the Non-Controlling Authorized Representative Enforcement Date (as defined below), the then-Applicable Authorized Representative will be replaced as Applicable Authorized Representative by the Authorized Representative of the Series of Pari Passu Obligations that then constitutes the next largest outstanding principal amount of all then-outstanding Pari Passu Obligations with respect to the Collateral (the “Major Non-Controlling Authorized Representative”).

The “Non-Controlling Authorized Representative Enforcement Date,” with respect to which a Non- Controlling Authorized Representative becomes the Applicable Authorized Representative is the date that is 90 days (throughout which 90-day period the applicable Non-Controlling Authorized Representative was the Major Non-Controlling Authorized Representative) after the occurrence of both (a) an event of default that has occurred and is continuing, as defined in the Indenture or any other applicable indenture or credit document for that Series of Pari Passu Obligations, and (b) the Collateral Agent’s and each other Authorized Representative’s receipt of written notice from that Authorized Representative certifying that (i) such Authorized Representative is the Major Non-Controlling Authorized Representative and that an event of default, as defined in the Indenture or any other applicable indenture or credit document for that Series of Pari Passu Obligations, has occurred and is continuing and (ii) the Pari Passu Obligations of that Series are currently due and payable in full (whether as a result of acceleration thereof or otherwise) in accordance with the Indenture or other applicable indenture or credit document, as applicable, for that Series of Pari Passu Obligations; provided that the Non-Controlling Authorized Representative Enforcement Date will be stayed and shall not occur and shall be deemed not to have occurred with respect to any Collateral if (1) at any time the Applicable Authorized Representative has commenced and is diligently pursuing any enforcement action with respect to such Collateral or (2) at any time the Company or the Guarantor that has granted a security interest in such Collateral is then a debtor under or with respect to (or otherwise subject to) any insolvency or liquidation proceeding. If no such stay occurs, or is deemed to occur, then the Major Non-Controlling Authorized Representative will become the Applicable Authorized Representative from and after the occurrence of the Non-Controlling Authorized Representative Enforcement Date.

Restrictions on Enforcement of Priority Liens

Subject to the terms of the Intercreditor Agreement, the Applicable Authorized Representative will have the sole right to instruct the Collateral Agent and each Pari Passu Debt Collateral Agent to act or refrain from acting with respect to the Collateral, and (a) neither Collateral Agent nor any Pari Passu Debt Collateral Agent will follow any instructions (other than certain types of instructions to exercise rights other than enforcement rights) with respect to the Collateral from any representative of any Non-Controlling Secured Party or other Pari Passu Secured Party (other than the Applicable Authorized Representative), and (b) no Authorized Representative of any Non-Controlling Secured Party or other Pari Passu Secured Party (other than the Applicable Authorized Representative) will instruct the Collateral Agent or any Pari Passu Debt Collateral Agent to commence any judicial or non-judicial foreclosure proceedings with respect to, seek to have a trustee, receiver, liquidator or similar official appointed for or over, attempt any action to take possession of, exercise any right, remedy or power with respect to, or otherwise take any action to enforce its interests in or realize upon, or take any other action available to it in respect of, the Collateral.

No representative of any Non-Controlling Secured Party may contest, protest or object to any foreclosure proceeding or action brought by or at the direction of the Controlling Authorized Representative in connection with the Intercreditor Agreement or the exercise of remedies against the Collateral in accordance with the terms of the Intercreditor Agreement. Each Authorized Representative will agree that it will not accept any Lien on any Collateral for the benefit of any series of Pari Passu Obligations (other than funds deposited for the discharge or defeasance of any Pari Passu Agreement) unless each other series of Pari Passu Obligations is also secured by a Lien on such Collateral. Each of the Pari Passu Secured Parties will also agree that it will not contest or support any other person in contesting, in any proceeding (including any insolvency or liquidation proceeding), the perfection, priority, validity or enforceability of a Lien held by or on behalf of any of the Pari Passu Secured Parties in all or any part of the Collateral, or the provisions of the Intercreditor Agreement.

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Notwithstanding the foregoing, with respect to any Collateral for which a third party (other than a Pari Passu Secured Party) has a lien or security interest that is junior in priority to the security interest of any Series of Pari Passu Obligations but senior (as determined by appropriate legal proceedings in the case of any dispute) to the security interest of any other Series of Pari Passu Obligations (such third party, an “Intervening Creditor”), the value of any Collateral or proceeds which are allocated to such Intervening Creditor will be deducted on a ratable basis solely from the Collateral or proceeds to be distributed in respect of the Series of Pari Passu Obligations with respect to which such impairment exists. In addition, the Pari Passu Secured Parties of each Series bear the risk that a court may deem that the Pari Passu Obligations of such Series (and not of any other Series) (i) are unenforceable under applicable law, (ii) are equitably subordinated to any other obligations or (iii) do not have an enforceable security interest in any of the Collateral that secures any other Series of Pari Passu Obligations. In the event of any such impairment, the rights of the holders of Pari Passu Obligations of the impaired Series under the Intercreditor Agreement will be modified to the extent necessary so that the effects of the impairment are borne solely by such impaired holders and not the holders of any other Series of Pari Passu Obligations.

None of the Pari Passu Secured Parties may institute any suit or assert in any suit, bankruptcy, insolvency or other proceeding any claim against the Collateral Agent or any other Pari Passu Secured Party seeking damages from or other relief by way of specific performance, instructions or otherwise with respect to any Collateral, except to the extent expressly permitted by the terms of the Intercreditor Agreement. In addition, none of the Pari Passu Secured Parties may seek to have any Collateral or any part thereof marshaled upon any foreclosure or other disposition of such Collateral. If any Pari Passu Secured Party obtains possession of any Collateral or realizes any proceeds or payment in respect thereof, at any time prior to the discharge of each of the Pari Passu Obligations, then it must hold such Collateral, proceeds or payment in trust for the other Pari Passu Secured Parties and promptly transfer such Collateral, proceeds or payment to the Applicable Authorized Representative to be distributed in accordance with the Intercreditor Agreement.

The Pari Passu Secured Parties acknowledge that the Pari Passu Obligations may, subject to the limitations set forth in the applicable debt documents, be increased, extended, renewed, replaced, restated, supplemented, restructured, repaid, refunded, refinanced or otherwise amended or modified from time to time, all without affecting the priorities set forth in the Intercreditor Agreement defining the relative rights of the Pari Passu Secured Parties; provided that the authorized representative of the holders of such amended or modified Indebtedness, if not a party to the Intercreditor Agreement, shall have executed a Joinder Agreement to the Intercreditor Agreement on behalf of the holders of such Indebtedness.

Release of Liens on Collateral

The Company and the Guarantors will be entitled to the release of property and other assets included in the Collateral from the Liens securing the Pari Passu Obligations under any one or more of the following circumstances:

•  to enable the disposition or other use of such property or assets to the extent permitted under the Indenture and all other Secured Credit Documents; and

•  in the case of a Guarantor that is released from its Note Guarantee and any guarantee under all other Secured Credit Documents, the release of the property and assets of such Guarantor.

The Liens on the Collateral securing the Notes and the Note Guarantees will also be released upon (i) the termination and release of all Liens on Collateral in accordance with the terms of the Indenture, each Pari Passu Agreement then in effect, the Intercreditor Agreement, and all other applicable Pari Passu Security Documents, or (ii) the consent of each Authorized Representative, the Company and, as applicable, Holders of the Notes and lenders under the Pari Passu Agreements and the Guarantors, it being agreed that the termination of the Collateral pursuant to the preceding clause (i) or (ii) will be concurrent with the termination of the Intercreditor Agreement and the other Pari Passu Security Documents (including the release of all Liens granted thereunder).

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Amendment of Security Documents

The Applicable Authorized Representative may enter into any amendment to any Pari Passu Security Document, so long as the Applicable Authorized Representative receives a certificate of the Company stating that such amendment is permitted by the terms of the Indenture and each other Secured Credit Document then in effect. The Applicable Authorized Representative will give notice to each other Authorized Representative of any release of Collateral and of any amendment to any Pari Passu Security Document. The Applicable Authorized Representative may not enter into any amendment that releases all or substantially all of the Collateral from the Liens under any Pari Passu Security Document without the written consent of each Authorized Representative.

Certain Covenants with Respect to the Collateral

The Collateral is pledged pursuant to the Security Documents, which contain provisions relating to the administration of the Collateral. The following is a summary of some of the covenants and provisions set forth in the Security Documents and the Indenture as they relate to the Collateral:

Further Assurances.  The Security Documents and the Indenture provide each Grantor will, at its own expense, promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary, or that Collateral Agent may reasonably request, in order to perfect any security interest granted or purported to be granted thereby or to enable the Collateral Agent to exercise and enforce its rights and remedies under such Security Documents with respect to any of the Collateral. Under the terms of the Guarantee and Collateral Agreement, each Grantor authorizes the filing by the Collateral Agent of financing or continuation statements, or amendments, and such Grantor will execute and deliver to the Collateral Agent such other instruments or notices, as may be necessary or as Collateral Agent may reasonably request, in order to perfect and preserve the security interest granted or purported to be granted under the Guarantee and Collateral Agreement.

Real Property Mortgages and Filings.  Each Grantor agrees that upon the acquisition of any fee interest in real property in excess of $1.0 million in value it will promptly notify the Collateral Agent of such acquisition and will grant to the Collateral Agent, for the benefit of the Trustee and the Holders of the Notes, a first priority mortgage (subject to Permitted Liens) on each fee interest in real property owned by such Grantor and will deliver such other documentation and opinions, in form and substance satisfactory to Collateral Agent, in connection with the grant of such mortgage as the Collateral Agent reasonably requests, including title insurance policies, financing statements, fixture filings and environmental audits and such Grantor will pay all recording costs, intangible taxes and other fees and costs (including reasonable attorneys’ fees and expenses) incurred in connection therewith.

New Subsidiaries.  Pursuant to the Indenture and the Guarantee and Collateral Agreement, any new direct Domestic Subsidiary (whether by acquisition or creation) of a Grantor is required to enter into the Guarantee and Collateral Agreement by executing and delivering a supplement to the Guarantee and Collateral Agreement in the form attached to the Guarantee and Collateral Agreement. Upon the execution and delivery of such supplement by such new Domestic Subsidiary, such Domestic Subsidiary shall become a Grantor under the Guarantee and Collateral Agreement, with the same force and effect as if originally named as a Grantor on the Closing Date.

Certain Bankruptcy Limitations

The right of the Collateral Agent (acting on behalf of the Trustee and the Holders of the Notes) to repossess and dispose of Collateral upon the occurrence of an Event of Default would be significantly impaired by applicable bankruptcy law in the event that a bankruptcy case were to be commenced by or against the Company or any Guarantor prior to and possibly after the Collateral Agent’s having repossessed and disposed of the Collateral. Upon the commencement of a case for relief under Title 11 of the United States Bankruptcy Code of 1978, as amended (the “Bankruptcy Code”), a secured creditor such as the Collateral Agent is prohibited from repossessing its security from a debtor in a bankruptcy case, or from disposing of security repossessed from the debtor, without bankruptcy court approval.

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In view of the broad equitable powers of a U.S. bankruptcy court, it is impossible to predict how long payments under the Notes could be delayed following commencement of a bankruptcy case, whether or when the Collateral Agent could repossess or dispose of the Collateral, the value of the Collateral at the time of the bankruptcy petition or whether or to what extent Holders of the Notes would be compensated for any delay in payment or loss of value of the Collateral. The Bankruptcy Code permits only the payment and/or accrual of post petition interest, costs and attorneys’ fees to a secured creditor during a debtor’s bankruptcy case to the extent the value of the Collateral is determined by the bankruptcy court to exceed the aggregate outstanding principal amount of the obligations secured by the Collateral.

Furthermore, in the event a domestic or foreign bankruptcy court determines that the value of the Collateral is not sufficient to repay all amounts due on the Notes, the Holders of the Notes would hold secured claims to the extent of the value of the Collateral to which the Holders of the Notes are entitled, and unsecured claims with respect to such shortfall.

Optional Redemption

The Company may redeem the Notes at any time on or after May 1, 2013. The redemption price for the Notes (expressed as a percentage of principal amount), will be as follows, plus accrued and unpaid interest and Additional Interest, if any, to the redemption date:

If Redeemed During the	Redemption
12-Month Period Commencing May 1,	Price
2013		105.875	%
2014		100.000	%

In addition, at any time prior to May 1, 2013, the Company may redeem up to 35% of the principal amount of the Notes with the Net Cash Proceeds of one or more sales of its Equity Interests (other than Disqualified Stock) at a redemption price of 111.75% of their principal amount, plus accrued interest and Additional Interest, if any, to the redemption date; provided that at least 65% of the aggregate principal amount of Notes originally issued (including any Additional Notes) remains outstanding after each such redemption and notice of any such redemption is mailed within 90 days of each such sale of Equity Interests.

At any time on or prior to May 1, 2013, the Notes may also be redeemed, in whole or in part, at the option of the Company, at a redemption price equal to 100% of the principal amount thereof plus the Applicable Premium as of, and accrued and unpaid interest and Additional Interest, if any, to, the redemption date.

The Company may acquire Notes by means other than a redemption, whether pursuant to an issuer tender offer, open market purchase or otherwise, so long as the acquisition does not otherwise violate the terms of the Indenture.

Notice of Redemption

The Company will give not less than 30 days’ nor more than 60 days’ notice of any redemption. If less than all of the Notes are to be redeemed, subject to DTC procedures, selection of the Notes for redemption will be made by the Trustee:

•  in compliance with the requirements of the principal national securities exchange, if any, on which the Notes are listed, or,

•  if the Notes are not listed on a national securities exchange, pro rata, by lot or by such other method as the Trustee in its sole discretion shall deem to be fair and appropriate, unless otherwise required by law.

However, no Notes of a principal amount of $2,000 or less shall be redeemed in part. If any Note is to be redeemed in part only, the notice of redemption relating to such Note will state the portion of the principal amount to be redeemed. A new Note in principal amount equal to the unredeemed portion will be issued upon cancellation of the original Note.

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Mandatory Redemption; Sinking Fund

The Company will not be required to make any mandatory redemption or sinking fund payments with respect to the Notes.

Repurchase at the Option of Holders

Change of Control

If a Change of Control occurs, each holder of Notes will have the right to require the Company to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000) of that holder’s Notes pursuant to a Change of Control Offer on the terms set forth in the Indenture. In the Change of Control Offer, the Company will offer a Change of Control Payment in cash equal to 101% of the aggregate principal amount of notes repurchased plus accrued and unpaid interest and Additional Interest, if any, on the Notes repurchased to the date of purchase, subject to the rights of holders of Notes on the relevant record date to receive interest due on the relevant interest payment date. Within 20 days following any Change of Control, the Company will mail a notice to each holder and the Trustee describing the transaction or transactions that constitute the Change of Control and offering to repurchase Notes on the Change of Control Payment Date specified in the notice, which date will be no earlier than 30 days and no later than 60 days from the date such notice is mailed, pursuant to the procedures required by the Indenture and described in such notice.

The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the Notes as a result of a Change of Control. To the extent that the provisions of any securities laws or regulations conflict with the Change of Control provisions of the indenture, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Change of Control provisions of the indenture by virtue of such compliance.

On the Change of Control Payment Date, the Company will, to the extent lawful:

(1) accept for payment all Notes or portions of Notes properly tendered pursuant to the Change of Control Offer;

(2) deposit with the paying agent an amount equal to the Change of Control Payment in respect of all Notes or portions of Notes properly tendered; and

(3) deliver or cause to be delivered to the Trustee the Notes properly accepted together with an officers’ certificate stating the aggregate principal amount of Notes or portions of Notes being purchased by the Company.

The paying agent will promptly mail to each Holder of Notes properly tendered the Change of Control Payment for such Notes, and the Trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any. The Company will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.

The Company will not be required to make a Change of Control Offer upon a Change of Control if (1) a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the Indenture applicable to a Change of Control Offer made by the Company and purchases all Notes properly tendered and not withdrawn under the Change of Control Offer, or (2) notice of redemption has been given pursuant to the Indenture as described above under the caption “— Optional Redemption,” unless and until there is a default in payment of the applicable redemption price. Notwithstanding anything to the contrary herein, a Change of Control Offer may be made in advance of a Change of Control, conditional upon such Change of Control, if a definitive agreement is in place for the Change of Control at the time of making of the Change of Control Offer.

The provisions described above that require the Company to make a Change of Control Offer following a Change of Control will be applicable whether or not any other provisions of the Indenture are applicable.

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Except as described above with respect to a Change of Control, the Indenture does not contain provisions that permit the Holders of the Notes to require that the Company repurchase or redeem the Notes in the event of a takeover, recapitalization or similar transaction.

If a Change of Control Offer is made, we cannot assure you that the Company will have available funds sufficient to pay the Change of Control purchase price for all the Notes that might be delivered by Holders seeking to accept the Change of Control Offer. In the event the Company is required to purchase Notes pursuant to a Change of Control Offer, the Company expects that it would seek third-party financing to the extent it does not have available funds to meet its purchase obligations. However, we cannot assure you that the Company would be able to obtain such financing. See “Risk Factors — Risks Related to the Notes — We may not be able to fulfill our repurchase obligations with respect to the notes upon a change of control or an asset sale.”

The Company’s future senior Indebtedness may prohibit events that would constitute a Change of Control. If the Company were to experience a change of control that triggers a default under such other senior Indebtedness, the Company could seek a waiver of such default or seek to refinance such other senior Indebtedness. In the event that the Company does not obtain such a waiver or refinance such senior Indebtedness, such default could result in amounts outstanding under such other senior Indebtedness to be declared due and payable. In addition, the exercise by the Holders of Notes of their right to require the Company to repurchase the Notes could cause a default under such other senior Indebtedness, even if the occurrence of the Change of Control itself does not, due to the financial effect of such repurchases on the Company.

The definition of Change of Control includes a phrase relating to the direct or indirect sale, lease, transfer, conveyance or other disposition of “all or substantially all” of the properties or assets of the Company and its Subsidiaries taken as a whole. Although there is a limited body of case law interpreting the phrase “substantially all,” there is no precise established definition of the phrase under applicable law. Accordingly, the ability of a holder of Notes to require the Company to repurchase its Notes as a result of a sale, lease, transfer, conveyance or other disposition of less than all of the assets of the Company and its Subsidiaries taken as a whole to another Person or group may be uncertain.

Asset Sales

The Company will not, and will not permit any Restricted Subsidiary to, consummate any Asset Sale, unless:

(1) the consideration received by the Company or such Restricted Subsidiary is at least equal to the Fair Market Value of the assets sold or disposed of and, if the Fair Market Value of the assets or Equity Interests issued or sold or otherwise disposed of is greater than $10.0 million, the Asset Sale is approved by the Company’s Board of Directors; and

(2) at least 75% of the consideration received consists of:

(a) cash or Temporary Cash Investments, or

(b) Designated Non-Cash Consideration received by the Company or any Guarantor in such Asset Sale having an aggregate Fair Market Value (when taken together with all other Designatured Non-Cash Consideration received pursuant to this clause (c)) that does not exceed 10% of the total assets of the Company and the Guarantors, on a consolidated basis, at the time of receipt of such Designated Non-Cash Consideration, with the Fair Market Value of each item of Designated Non-Cash Consideration being measured at the time it was received and without giving effect to subsequent changes in value.

For purposes of this provision, any securities, notes or other obligations received by the Company or any such Restricted Subsidiary that are converted by the Company or such Restricted Subsidiary into cash within 30 days after receipt (to the extent of the cash received in such conversion) shall be deemed to be cash.

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Within 365 days after the receipt of any Net Proceeds from an Asset Sale, the Company (or the applicable Restricted Subsidiary, as the case may be) may apply such Net Proceeds at its option:

(1) to repay Indebtedness under any Credit Facility of the Company or any Restricted Subsidiary, in each case owing to a Person other than the Company or any Affiliate of the Company; or

(2) to invest (or enter into a definitive agreement committing to invest) in Replacement Assets or capital expenditures (provided that if any such commitment terminates for any reason, the Company shall, within 45 days after such termination, apply such Net Cash Proceeds in accordance with the provisions of this or the following paragraph, unless a replacement commitment has been entered into within such 45 day period); or

(3) to make one or more offers to the Holders of the Notes (and, at the option of the Company, the holders of Pari Passu Indebtedness) to purchase Notes (and such other Pari Passu Indebtedness) pursuant to and subject to the conditions applicable to an Asset Sale Offer described below; or

(4) to acquire (or enter into a definitive commitment to acquire) all or substantially all of the assets of, or any capital stock of another Permitted Business, if, after giving effect to such acquisition of capital stock, the Permitted Business is or becomes a Restricted Subsidiary (provided that if any such commitment terminates for any reason, the Company shall, within 45 days after such termination, apply such Net Cash Proceeds in accordance with the provisions of this or the following paragraph, unless a replacement commitment has been entered into within such 45 day period); or

(5) any combination of the foregoing.

Any Net Cash Proceeds from Asset Sales that are not applied or invested as provided in the preceding paragraph of this covenant will constitute “Excess Proceeds.” If, as of the first day of any calendar month, the aggregate amount of Excess Proceeds not theretofore subject to an Asset Sale Offer pursuant to this covenant totals at least $20.0 million, the Company must commence, not later than the fifteenth Business Day of such month, and consummate an Asset Sale Offer from the Holders (and if required by the terms of any Indebtedness that is pari passu with the Notes (“Pari Passu Indebtedness”), from the holders of such Pari Passu Indebtedness) on a pro rata basis an aggregate principal amount of Notes (and Pari Passu Indebtedness) equal to the Excess Proceeds on such date, at a purchase price equal to 100% of their principal amount, plus, in each case, accrued interest (if any) to the Payment Date. Pending the final application of any such Net Cash Proceeds, the Company or any of its Restricted Subsidiaries may temporarily reduce revolving credit borrowings or otherwise invest such Net Cash Proceeds in any manner that is not prohibited by the terms of the Indenture. If any Excess Proceeds remain after the consummation of any Asset Sale Offer, the Company may use such Excess Proceeds for any other purpose not otherwise prohibited by the Indenture. Upon completion of each Asset Sale Offer, the amount of Excess Proceeds will reset to zero.

The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with each repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the Asset Sale provisions of the Indenture, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Asset Sale provisions of the indenture by virtue of such compliance.

Certain Covenants

Overview

In the Indenture, the Company has agreed to covenants that limit its and its Restricted Subsidiaries’ ability, among other things, to (subject to certain express exceptions):

•  incur additional Indebtedness and issue preferred stock;

•  pay dividends and make distributions in respect of capital stock;

•  make investments or certain other restricted payments;

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•  place limits on dividends and enter into other payment restrictions affecting certain subsidiaries;

•  engage in sale-leaseback transactions;

•  enter into transactions with stockholders or affiliates;

•  guarantee debt;

•  sell assets;

•  create liens;

•  issue or sell stock of certain subsidiaries; and

•  merge or consolidate.

Limitation on Indebtedness

The Company will not, and will not permit any Restricted Subsidiary to, create, incur, assume or Guarantee the payment of any Indebtedness (including Acquired Indebtedness) other than Permitted Indebtedness and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or preferred stock to any Person other than the Company or its Wholly Owned Restricted Subsidiaries unless, after giving effect to the transaction, its Fixed Charge Coverage Ratio for the four full fiscal quarters immediately preceding the transaction for which internal financial statements are available immediately preceding the date of such transaction, taken as a single period, is 2.0 to 1 or greater, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if the additional Indebtedness had been incurred or the Disqualified Stock (or the preferred stock, if applicable) had been issued, as the case may be, at the beginning of such four-quarter period.

The first paragraph of this covenant will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Indebtedness”):

(1) Indebtedness under Credit Facilities outstanding at any time in an aggregate principal amount not to exceed $5.0 million;

(2) additional Indebtedness of the Company and its Restricted Subsidiaries in an aggregate principal amount outstanding at any time not to exceed $10.0 million;

(3) Indebtedness of the Company or any of its Restricted Subsidiaries outstanding on the Closing Date;

(4) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than Intercompany Debt Obligations) that was permitted by the Indenture to be incurred under the first paragraph of this covenant or clauses (3), (4) or (7) of this paragraph;

(5) Intercompany Debt Obligations between or among the Company and any of its Wholly Owned Restricted Subsidiaries; provided that any Intercompany Debt Obligations of the Company incurred after the Closing Date other than in connection with Refinancing Indebtedness must be evidenced by an intercompany note; provided further that (i) any subsequent issuance or transfer of any Equity Interests that results in such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary and (ii) any sale or other transfer of such Indebtedness to a Person other than the Company or a Restricted Subsidiary shall each be deemed to be an incurrence of Indebtedness by the obligor if and to the extent that it is the Company or a continuing Restricted Subsidiary of the Company;

(6) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any

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of its Restricted Subsidiaries, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (6), not to exceed $10.0 million;

(7) Indebtedness under (a) the Notes and the Note Guarantees issued on the Closing Date, (b) the exchange notes and the Note Guarantees in respect thereof to be issued pursuant to the Registration Rights Agreement and (c) Indebtedness under (i) the old notes and the related Note Guarantees issued after the Closing Date and (ii) the exchange notes and Note Guarantees in respect thereof to be issued pursuant to a Registration Rights Agreement, in the aggregate principal amount not to exceed $52.0 million;

(8) Indebtedness represented by Guarantees by the Company or its Restricted Subsidiaries of Indebtedness otherwise permitted to be incurred;

(9) Hedging Obligations incurred by the Company or any of its Restricted Subsidiaries in the ordinary course of business;

(10) Indebtedness of the Company or any Restricted Subsidiary consisting of Guarantees, indemnities, or obligations in respect of purchase price adjustments, earnout or similar obligations, in connection with the acquisition or disposition of assets (other than Guarantees of Indebtedness by any Person acquiring such assets for the purpose of financing such acquisition), so long as the amount does not exceed the gross proceeds actually received by the Company in connection with such disposition;

(11) Indebtedness of the Company or any Restricted Subsidiary constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business;

(12) Indebtedness of the Company or any of its Restricted Subsidiaries in respect to performance bonds, bankers’ acceptances, workers compensation claims, surety or appeal bonds payment obligations in connection with self-insurance or similar obligations;

(13) Indebtedness of the Company or any of its Restricted Subsidiaries arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is promptly extinguished; and

(14) Indebtedness of Foreign Restricted Subsidiaries so long as the aggregate principal amount outstanding shall not exceed $5.0 million (or the currency equivalent thereof).

For purposes of determining compliance with this covenant if an item of Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness or may be incurred under the Fixed Charge Coverage Ratio, the Company may classify (and from time to time may reclassify) the Indebtedness in its sole discretion.

Notwithstanding any other provision of this “Limitation on Indebtedness” covenant, the maximum amount of Indebtedness that may be incurred pursuant to this “Limitation on Indebtedness” covenant will not be deemed to be exceeded, with respect to any outstanding Indebtedness, due solely to the result of fluctuations in the exchange rates of currencies between the dates such non-dollar Indebtedness was incurred and the measurement date for purposes of this provision.

The Company will not incur any Indebtedness if such Indebtedness is subordinate in right of payment to any other Indebtedness unless such Indebtedness is also subordinate in right of payment to the Notes to the same extent. For purposes of the foregoing, no Indebtedness will be deemed to be subordinated in right of payment to any other Indebtedness solely by virtue of being unsecured, by virtue of being secured by different collateral or by virtue of the fact that the holders of any secured Indebtedness have entered into intercreditor agreements giving one or more of such holders priority over the other holders in the collateral held by them.

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Limitation on Restricted Payments

The Company will not, and will not permit any Restricted Subsidiary, directly or indirectly, to make any Restricted Payment unless, at the time and after giving effect to the proposed Restricted Payment, the following conditions are met:

(1) no Default or Event of Default under the Indenture shall have occurred and be continuing (or would result therefrom);

(2) at the time of and after giving effect to any proposed Restricted Payment, the Company would be able to incur at least $1.00 of Indebtedness under the Fixed Charge Coverage Ratio described above under “Limitation on Indebtedness”; and

(3) such payment, along with the aggregate amount of all Restricted Payments declared or made on or after the Closing Date may not exceed the sum of

(a) 50% of the Company’s total Consolidated Net Income accrued on a cumulative basis during the period from the beginning of the first fiscal quarter which begins after the Closing Date and ending on the last day of its last fiscal quarter ending prior to the date of the proposed Restricted Payment for which internal financial statements are available at the time of such Restricted Payment (or if such aggregate cumulative Consolidated Net Income is a loss, minus 100% of such loss); plus

(b) 100% of the aggregate Net Cash Proceeds received by the Company on or after the Closing Date (i) as capital contributions or (ii) from the issuance and sale of (x) Equity Interests of the Company to any Person or entity other than a Subsidiary of the Company, excluding the issuance or sale of Disqualified Stock and the Series A Non-Voting Preferred Stock or (y) any other securities of the Company, upon the conversion or exchange of such securities into Equity Interests of the Company, other than Disqualified Stock; plus

(c) to the extent that any Restricted Investment that was made after the Closing Date is sold for cash or repaid (whether through interest payments, principal payments, dividends or other distributions), the amount received in cash from such sale or repayment; plus

(d) to the extent that any Restricted Investment was made in an Unrestricted Subsidiary or other entity after the Closing Date and such Unrestricted Subsidiary or other entity is redesignated as or becomes a Restricted Subsidiary, the lesser of (i) the Fair Market Value of the Investment in such Subsidiary on the date of such redesignation and (ii) the initial amount of such Restricted Investment.

The provisions of the preceding paragraph shall not prohibit the following:

(a) the payment of any dividend, within 60 days after it was declared, if at the date it was declared, the payment would have been permitted;

(b) the making of any Restricted Payment or the redemption, repurchase, retirement, defeasance or other acquisition of any Equity Interests of the Company (or Indebtedness that is subordinated to the Notes or any Subsidiary Guarantee) by conversion into, in exchange for, or out of the net proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, any Equity Interests of the Company (other than any Disqualified Stock); provided that, in each such case, the amount of any such net cash proceeds that are so utilized shall be excluded from clause (3)(b) of the preceding paragraph and clause (e) of this paragraph;

(c) the payment, redemption, repurchase, defeasance or other acquisition or retirement for value of Indebtedness that is subordinated to the Notes or any Subsidiary Guarantee, including premium, if any, and accrued interest, with the proceeds of, or in exchange for, a substantially concurrent incurrence of Permitted Refinancing Indebtedness;

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(d) the payment of any dividend (or, in the case of any partnership or limited liability company, any similar distribution) by a Restricted Subsidiary of the Company to the holders of its Equity Interests to the extent such payments are made on a pro rata basis;

(e) so long as no Default or Event of Default shall have occurred and be continuing (or would result therefrom), the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company held by any current or former director, officer, employee or agent of the Company (or any of its Subsidiaries) pursuant to any management equity subscription agreement, stock option agreement or other employee benefit plan or arrangement; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests shall not exceed $1.0 million in any twelve-month period; provided further, that the Company may carry over and make in subsequent twelve-month periods, in addition to the amounts permitted for such twelve-month period, any unutilized capacity under this clause (e) attributable to the immediately preceding twelve-month period; provided, further, that such amount in any twelve-month period may be increased by an amount not to exceed the cash proceeds from the sale of Equity Interests of the Company (other than Disqualified Stock) to members of management, directors or consultants of the Company or any of its Subsidiaries that occurs after the date of the Indenture to the extent the cash proceeds from the sale of such Equity Interests have not otherwise been applied to the making of Restricted Payments pursuant to clause (3)(b) of the preceding paragraph or clause (b) of this paragraph; and in addition, cancellation of Indebtedness owing to the Company from any current or former officer, director or employee (or any permitted transferees thereof) of the Company or any of its Restricted Subsidiaries (or any direct or indirect parent company thereof), in connection with a repurchase of Equity Interests of the Company from such Persons will not be deemed to constitute a Restricted Payment for purposes of this covenant or any other provisions of the indenture;

(f) the purchase of Equity Interests of the Company deemed to occur upon the exercise of stock options or warrants if such Equity Interests represent all or a portion of the exercise price of (or taxes in respect of the exercise of) such options or warrants;

(g) cash payments in lieu of the issuance of fractional shares;

(h) the distribution, by dividend or otherwise, of Equity Interests in any Unrestricted Subsidiary;

(i) so long as no Default or Event of Default has occurred and is continuing, within 120 days after completion of any offer to repurchase Notes pursuant to the covenant described above under the captions “— Repurchase at the Option of Holders — Asset Sales” or “— Repurchase at the Option of Holders — Change of Control” (including the purchase of all Notes tendered), any purchase or redemption of any subordinated Indebtedness or any Indebtedness of the Company or any Guarantor that is contractually subordinated to the Notes or to any Note Guarantee, in each case, that is required to be repurchased or redeemed pursuant to the terms thereof as a result of such Asset Sale or such Change of Control;

(j) the redemption, repurchase, defeasance or other acquisition or retirement of the Series A Non-Voting Preferred Stock which is redeemed, repurchased, defeased, acquired or retired with proceeds from the old notes; and

(k) so long as no Default or Event of Default shall have occurred and be continuing (or would result therefrom), any Restricted Payment which, together with all other Restricted Payments made pursuant to this clause (j) on or after the Closing Date, does not exceed $5.0 million.

In determining the aggregate amount of Restricted Payments made subsequent to the Closing Date in accordance with clause (3) above, amounts expended pursuant to clauses (a), (e), and (k) shall be included in such calculation. If a Restricted Payment is not made in cash, its value, if in excess of $5.0 million, must be determined by the Company’s Board of Directors as evidenced by a resolution of the Board of Directors.

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Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries

The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create or agree to any encumbrance or restriction on the ability of any Restricted Subsidiary to (1) pay dividends or make any other distributions on its Equity Interests to the Company or any of the Company’s Restricted Subsidiaries, or with respect to any other interest or participation in, or measured by, its profits, or pay any Indebtedness owed to the Company or any of the Company’s Restricted Subsidiaries; or (2) make loans or advances to the Company or any of the Company’s Restricted Subsidiaries.

However, the preceding restrictions will not apply to encumbrances or restrictions existing under or by reason of:

(1) those in existence on the Closing Date in the Indenture or any other agreements in effect on the Closing Date, and any amendments, modifications, restatements, supplements, extensions, increases, refinancings, renewals, refundings or replacements of such agreements; provided that the encumbrances and restrictions in any such amendments, modifications, restatements, supplements, extensions, increases, refinancings, renewals, refundings or replacements are not materially less favorable, taken as a whole (as determined by the Company in good faith), to the Holders than those encumbrances or restrictions that are then in effect and that are being amended, modified, restated, supplemented, extended, increased, refinanced, renewed, refunded or replaced;

(2) the Indenture, the Notes, the Note Guarantees and the other Security Documents;

(3) applicable law, rules, regulations or orders;

(4) any agreement or instrument (including Acquired Indebtedness) applicable to or binding on a Person acquired by the Company or any of its Restricted Subsidiaries as in effect at the time of such acquisition (except to the extent such agreement or instrument was entered into in connection with or in contemplation of such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired, provided that, in the case of such acquired Person’s Indebtedness, such Indebtedness was permitted to be incurred by the terms of the Notes, and any amendments, modifications, restatements, supplements, extensions, increases, refinancings, renewals, refundings or replacements of such agreements, provided further that the encumbrances and restrictions in any such amendments, modifications, restatements, supplements, extensions, increases, refinancings, renewals, refundings or replacements are not materially less favorable, taken as a whole (as determined by the Company in good faith), to the Holders than those encumbrances or restrictions that are then in effect and that are being amended, modified, restatements, supplemented, extended, increased, refinanced, renewed, refunded or replaced;

(5) restrictions on the ability of any Foreign Restricted Subsidiary to make dividends or distributions resulting from the operation of payment defaults and reasonable financial covenants (as determined in good faith by the Company) contained in documents governing Indebtedness of Foreign Restricted Subsidiaries permitted to be incurred under the provisions of the covenant described above under the caption “— Limitation on Indebtedness”, provided that, such Indebtedness does not to exceed $50.0 million in the aggregate at any time outstanding;

(6) any agreement for the sale or other disposition of a Restricted Subsidiary that restricts distributions by such Restricted Subsidiary pending its sale or other disposition;

(7) provisions with respect to the disposition or distribution of assets or property in joint venture agreements, asset sale agreements, sale-leaseback agreements, stock sale agreements and other similar agreements (including agreements entered into in connection with a Restricted Investment) entered into in the ordinary course of business or with the approval of the Company’s Board of Directors;

(8) restrictions on cash or other deposits or net worth under contracts entered into in the ordinary course of business;

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(9) encumbrances and restrictions in Indebtedness refinancing other Indebtedness provided that the encumbrances and restrictions contained in the new Indebtedness are not materially less favorable, taken as a whole (as determined by the Company in good faith), to the Holders, than those contained in the Indebtedness being refinanced;

(10) encumbrances on and agreements or instruments relating to any property, asset or business acquired by the Company or a Restricted Subsidiary as in effect at the time of such acquisition, which encumbrances or restrictions are not applicable to any other properties, assets or businesses of the Company or its Restricted Subsidiaries and were not incurred in contemplation of such acquisition;

(11) customary restrictions imposed on the transfer of, or in licenses related to, copyrights, patents or other intellectual property and contained in agreements entered into in the ordinary course of business;

(12) any restriction contained in mortgages, pledges or other agreements securing Indebtedness of the Company or any Restricted Subsidiary to the extent such restriction restricts the transfer of the property subject to such mortgages, pledges or other security agreements;

(13) restrictions imposed by an agreement to sell or otherwise dispose of assets or Equity Interests to any person pending the closing of such sale or other disposition; and

(14) customary non-assignment provisions and restrictions on sub-letting contained in contracts, leases or licenses entered into in the ordinary course of business.

Nothing contained in this “Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries” covenant shall prevent the Company or any Restricted Subsidiary from (1) creating, incurring, assuming or suffering to exist any Liens otherwise permitted in the “Limitation on Liens” covenant or (2) restricting the sale or other disposition of property or assets of the Company or any of its Restricted Subsidiaries that secure Indebtedness of the Company or any of its Restricted Subsidiaries.

Limitation on Guarantees by Restricted Subsidiaries

The Company will not permit any Restricted Subsidiary that is a Domestic Restricted Subsidiary, directly or indirectly, by way of the pledge of any intercompany note or otherwise, to assume, guarantee or in any other manner become liable with respect to any Indebtedness of the Company, unless, in any such case:

(1) within 30 days thereafter, such Domestic Restricted Subsidiary executes and delivers a supplemental indenture to the Indenture, providing a Note Guarantee of payment of the Notes by such Domestic Restricted Subsidiary if not previously delivered; and

(2) if such assumption, guarantee or other liability of such Domestic Restricted Subsidiary is provided in respect of Indebtedness that is expressly subordinated to the Notes, the guarantee or other instrument provided by such Domestic Restricted Subsidiary in respect of such subordinated Indebtedness shall be subordinated to the Guarantee pursuant to subordination provisions that are substantially the same as those contained in the instrument pursuant to which such subordinated Indebtedness is issued.

Notwithstanding the foregoing, any such Note Guarantee by a Domestic Restricted Subsidiary of the Notes shall provide by its terms that it shall be automatically and unconditionally released and discharged, without any further action required on the part of the Trustee or any Holder, upon:

(1) the unconditional release of such Domestic Restricted Subsidiary from its liability in respect of the Indebtedness in connection with which such Note Guarantee was executed and delivered pursuant to the preceding paragraph; or

(2) any sale or other disposition (by merger or otherwise) to any Person that is not a Restricted Subsidiary of the Company of the Company’s Equity Interests, such that immediately after giving effect to such transaction, such Domestic Restricted Subsidiary would no longer constitute a Subsidiary of the Company, or any sale or other disposition of all or substantially all of the assets of, such Domestic Restricted Subsidiary; provided that: (a) such sale or disposition of such Equity Interests or assets is otherwise in compliance with the terms of the Indenture; and (b) such assumption, guarantee or other

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liability of such Domestic Restricted Subsidiary has been released by the holders of the other Indebtedness so guaranteed.

Transactions with Affiliates of the Company

The Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly enter into any transaction or series of related transactions (including, without limitation, the sale, purchase, exchange or lease of assets, property or services) with any Affiliate of the Company involving aggregate payments or consideration in excess of $1.0 million unless the following conditions are met:

(1) the transaction or series of transactions must be on terms which are as favorable to the Company or the Restricted Subsidiary, taken as a whole, as would be available in a comparable transaction with an unrelated third party;

(2) if the transaction or series of transactions involves aggregate payments of $10.0 million or more, then the transaction or series of transactions must be approved by the Company’s Board of Directors, including the approval of a majority of directors who are not Affiliates of the Company in connection with the transaction or transactions being approved; and

(3) if the transaction or series of transactions involves aggregate payments of $15.0 million or more, then the Company must deliver to the Trustee an opinion as to the fairness from a financial point of view to the Company and its Subsidiaries, taken as a whole, of such transaction or series of transactions issued by an accounting, appraisal or investment banking firm of national standing.

However, this provision does not apply to:

(1) any employment or compensation agreement (whether based in cash or securities), stock option plan, stock ownership plan or employee benefit plan, officer or director indemnification agreement or any similar arrangement entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of business and payments pursuant thereto;

(2) loans and advances to employees of the Company or any Subsidiary in the ordinary course of business not otherwise prohibited pursuant to the terms of the Notes;

(3) Restricted Payments that are permitted by the terms of the Notes described under the covenant “Limitation on Restricted Payments” or Permitted Investments;

(4) issuances of Equity Interests (other than Disqualified Stock) of the Company by the Company and the granting or performance of registration rights;

(5) any transaction between or among the Company and one or more Restricted Subsidiaries of the Company or among one or more Restricted Subsidiaries of the Company;

(6) if such transaction is with any Person solely in its capacity as a holder of Indebtedness or Equity Interests of the Company or any of its Restricted Subsidiaries, if such person is treated no more favorably than any other holder of Indebtedness or Equity Interest of the Company; provided such Person owns less than 10% of such Indebtedness or Equity Interests;

(7) payment of reasonable and customary fees and reimbursements of expenses (pursuant to indemnity arrangements or otherwise) of officers, directors, employees or consultants of the Company or any of its Restricted Subsidiaries;

(8) transactions with customers, clients, suppliers, or purchasers or sellers of goods or services that do not, directly or indirectly, own Equity Interests in the Company and in which the Company does not, directly or indirectly, own Equity Interests, in each case, in the ordinary course of business and otherwise in compliance with the terms of the Indenture and which are on terms that are no less favorable to the Company or the relevant Restricted Subsidiary that those that would have been obtained in a comparable arm’s length transaction with a person that is not an Affiliate of the Company;

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(9) any agreement between any Person and an Affiliate of such Person existing at the time such Person is acquired by or merged into the Company or any of the Company’s Restricted Subsidiaries; provided that such agreement was not entered into contemplation of such acquisition or merger;

(10) any agreement as in effect on the Closing Date or any amendment thereto so long as the amendment is not materially more disadvantageous to the Holders, taken as a whole, than the agreement existing on Closing Date (as determined in good faith by the Company); and

(11) issuances of old notes to any Affiliate on terms which are as favorable to the Issuer and the Restricted Subsidiaries, taken as a whole, as is available in a simultaneous or comparable issuance of old notes with an unrelated third party.

Limitation on Liens

The Company will not, and will not permit any Restricted Subsidiary to, create, assume, incur or suffer to exist any Lien upon any of their assets now owned or hereafter acquired, except for Permitted Liens.

Limitation on Sale-Leaseback Transactions

The Company will not, and will not permit any of its Restricted Subsidiaries to, enter into any sale and leaseback transaction; provided that the Company and any Restricted Subsidiary may enter into a sale and leaseback transaction if:

(i) the Company or such Restricted Subsidiary could have (a) incurred Indebtedness in an amount equal to the Attributable Debt relating to such sale and leaseback transaction pursuant to the first paragraph of the covenant described above under the caption “— Limitation on Indebtedness” and (b) incurred a Lien to secure such Indebtedness pursuant to the covenant described above under the caption “— Limitation on Liens”;

(ii) the gross cash proceeds of such sale and leaseback transaction are at least equal to the Fair Market Value of the property that is the subject of such sale and leaseback transaction; and

(iii) the transfer of assets in such sale and leaseback transaction is permitted by, and the Company applies the proceeds of such transaction in compliance with, the covenant described above under the caption “Repurchase at the Option of Holders — Asset Sales.”

The foregoing restriction does not apply to any sale-leaseback transaction if:

(1) the lease is for a period, including renewal rights, of not in excess of three years; or

(2) the transaction is solely between the Company and one or more Wholly Owned Restricted Subsidiaries or solely between Wholly Owned Restricted Subsidiaries; or

(3) the property that is the subject of the sale leaseback transaction is the Hartland Property.

Business Activities

The Company will not, and will not permit any of its Restricted Subsidiaries to, engage in any business other than Permitted Businesses, except to such extent as would not be material to the Company and its Restricted Subsidiaries taken as a whole.

Payments for Consent

The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration to or for the benefit of any holder of Notes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of the Indenture or the Notes unless such consideration is offered to be paid and is paid to all holders of the Notes that consent, waive or agree to amend such terms and provisions in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement.

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Consolidation, Merger and Sale of Assets

The Company will agree not to consolidate or merge with or into any other entity, or sell, lease or convey all or substantially all of its assets, to any other entity in any one or more transactions unless the following conditions are met:

(1) the resulting, surviving or transferee Person (the “Surviving Entity”) is organized under the laws of the United States of America or any state thereof or the District of Columbia, and the Surviving Entity (if not the Company) shall expressly assume, by an indenture supplemental thereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, all of the Company’s obligations under the Notes and the Indenture;

(2) immediately after giving effect to the transaction (and treating any Indebtedness which becomes an obligation of the Surviving Entity or any Restricted Subsidiary as a result of such transaction as having been incurred by such Surviving Entity or such Restricted Subsidiary at the time of such transaction), no Default or Event of Default under the Indenture shall have occurred and be continuing;

(3) immediately after giving effect to the transaction (and treating any Indebtedness which becomes an obligation of the Surviving Entity or any Restricted Subsidiary as a result of such transaction as having been incurred by such Surviving Entity or such Restricted Subsidiary at the time of such transaction), either (a) the Surviving Entity would be able to incur at least $1.00 of Indebtedness under the Fixed Charge Coverage Ratio described above under “Limitation on Indebtedness,” determined on a pro forma basis as if such transaction had occurred at the beginning of the immediately preceding four-quarter period; or (b) the Fixed Charge Coverage Ratio for the Surviving Entity, determined on a pro forma basis (including Pro Forma Cost Savings) as if such transaction had occurred at the beginning of the immediately preceding four-quarter period, would be greater than the actual Fixed Charge Coverage Ratio for the Company for the most recently completed four-quarter period prior to the transaction; and

(4) the Company must deliver to the Trustee an Officers’ Certificate and Opinion of Counsel, in each stating that such consolidation, merger or transfer and such supplemental indenture complies with this provision and that all conditions precedent provided for herein relating to such transaction have been complied with.

If the Company is not the Surviving Entity and the transaction meets the above conditions, the Surviving Entity will be substituted for the Company and after that the Company will no longer have any obligations under the Indenture or the Notes except in the case of a conveyance, transfer or lease to an Affiliate of the Company or a lease of substantially all of the assets of the Company.

Notwithstanding the foregoing, if the Company effects a consolidation, merger or sale, conveyance, assignment, transfer, lease or other disposition of substantially all of its assets, the condition set forth in clause (3) of the paragraph above shall not apply to a transaction involving a Surviving Entity which is otherwise subject to the foregoing provisions if: (A) the consolidation or merger, or any sale, assignment, transfer, conveyance, lease or other disposition of assets is between or among the Company and its Restricted Subsidiaries; or (B) the merger was affected solely in connection with a reincorporation of the Company.

SEC Reports and Reports to Holders

Whether or not required by the rules and regulations of the SEC, so long as any Notes are outstanding, the Company will furnish to the Holders of Notes and the Trustee or make available to the Holders of Notes, within the time periods specified in the SEC’s rules and regulations:

(1) all quarterly and annual reports that would be required to be filed with the SEC on Forms 10-Q and 10-K if the Company were required to file such reports; and

(2) all current reports that would be required to be filed with the SEC on Form 8-K if the Company were required to file such reports.

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All such reports will be prepared in all material respects in accordance with all of the rules and regulations applicable to such reports. Each annual report on Form 10-K will include a report on the Company’s consolidated financial statements by the Company’s certified independent accountants. In addition, the Company will file a copy of each of the reports referred to in clauses (1) and (2) above with the SEC for public availability within the time periods specified in the rules and regulations applicable to such reports (unless the SEC will not accept such a filing) and will post the reports on its website within those time periods.

If, at any time after consummation of the exchange offer contemplated by the Registration Rights Agreement, the Company is no longer subject to the periodic reporting requirements of the Exchange Act for any reason, the Company will nevertheless continue filing the reports specified in the preceding paragraphs of this covenant with the SEC within the time periods specified above unless the SEC will not accept such a filing. The Company will not take any action for the purpose of causing the SEC not to accept any such filings. If, notwithstanding the foregoing, the SEC will not accept the Company’s filings for any reason, the Company will post the reports referred to in the preceding paragraphs on its website within the time periods that would apply if the Company were required to file those reports with the SEC.

If the Company has designated any of its Subsidiaries as Unrestricted Subsidiaries, then the quarterly and annual financial information required by the preceding paragraphs will include a reasonably detailed presentation, either on the face of the financial statements or in the footnotes thereto, and in Management’s Discussion and Analysis of Financial Condition and Results of Operations, of the financial condition and results of operations of the Company and its Restricted Subsidiaries separate from the financial condition and results of operations of the Unrestricted Subsidiaries of the Company.

In addition, the Company and the Guarantors agree that, for so long as any Notes remain outstanding, if at any time they are not required to file with the SEC the reports required by the preceding paragraphs, they will furnish to the Holders of Notes and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

Events of Default

The following events will be defined as “Events of Default” in the Indenture:

(a) default in the payment of any installment of interest on any Notes for 30 days after becoming due;

(b) default in the payment of the principal of (or premium, if any, on) any Notes when due;

(c) default in the performance of any other covenant contained in the terms of the Notes or the Indenture for a period of 60 days (or 90 days in the case of a failure to comply with the reporting obligations under the caption “— Financial Reports”) after written notice of such failure, requiring the Company to remedy the same, shall have been given to the Company by the Trustee or to the Company and the Trustee by the holders of 25% in aggregate principal amount of the Notes then-outstanding;

(d) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any of its Restricted Subsidiaries (or the payment of which is guaranteed by the Company or any of its Restricted Subsidiaries), whether such Indebtedness or Guarantee now exists, or is created after the date of the Indenture, if that default:

(A) is caused by a failure to pay principal of, or interest or premium, if any, on, such Indebtedness prior to the expiration of the grace period provided in such Indebtedness on the date of such default (a “Payment Default”); or

(B) results in the acceleration of such Indebtedness prior to its express maturity,

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and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $10.0 million or more;

(e) one or more judgments, orders or decrees for the payment of money in excess of $10.0 million, either individually or in the aggregate, shall be entered against the Company or any Restricted Subsidiaries and shall not be discharged, paid, stayed, subject to a negotiated settlement or subject to insurance, there shall have been a period of 60 days during which a stay of enforcement of such judgment or order, by reason of an appeal or otherwise, shall not be in effect;

(f) a court having jurisdiction in the premises enters a decree or order for (A) relief in respect of the Company or any Significant Subsidiary in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, (B) appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Company or any Significant Subsidiary or for all or substantially all of the property and assets of the Company or any Significant Subsidiary or (C) the winding up or liquidation of the affairs of the Company or any Significant Subsidiary and, in each case, such decree or order shall remain unstayed and in effect for a period of 90 consecutive days;

(g) the Company or any Significant Subsidiary (A) commences a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consents to the entry of an order for relief in an involuntary case under any such law, (B) consents to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Company or any Significant Subsidiary or for all or substantially all of the property and assets of the Company or any Significant Subsidiary or (C) effects any general assignment for the benefit of creditors;

(h) default in the performance or breach of the provisions of the Indenture applicable to mergers, consolidations and transfers of all or substantially all of the assets of the Company or the failure by the Company to make or consummate an Asset Sale Offer in accordance with the “Repurchase at the Option of Holders — Asset Sales” or a Change of Control Offer in accordance with the “Repurchase at the Option of Holders — Change of Control” covenant;

(i) (A) any security interest created by any Collateral Document ceases to be in full force and effect (except as permitted by the terms of the Indenture or the Security Documents) or (B) the breach or repudiation by the Company or any of its Restricted Subsidiaries of any of their obligations under any Collateral Document; provided that, in the case of clauses (A) and (B), such cessation, breach or repudiation, individually or in the aggregate, results in Collateral having a Fair Market Value in excess of $10.0 million not being subject to a valid, perfected security interest and does not result from any unauthorized action or inaction by the Collateral Agent; or

(j) except as permitted by the Indenture, any Note Guarantee is held in any judicial proceeding to be unenforceable or invalid or ceases for any reason to be in full force and effect, or any Guarantor, or any Person acting on behalf of any Guarantor, denies or disaffirms its obligations under its Note Guarantee.

If an Event of Default (other than an Event of Default specified in clause (f) or (g) that occurs with respect to the Company) occurs and is continuing under the Indenture, the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes, then-outstanding, by written notice to the Company (and to the Trustee if such notice is given by the Holders), may declare the principal of, premium, if any, and accrued interest on the Notes to be immediately due and payable. Upon a declaration of acceleration, such principal of, premium, if any, and accrued interest shall be immediately due and payable. If an Event of Default specified in clause (f) or (g) above occurs with respect to the Company, the principal of, premium, if any, and accrued interest on the Notes then-outstanding shall automatically become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder. The Holders of at least a majority in principal amount of the outstanding Notes by written notice to the Company and to the Trustee, may waive all past defaults and rescind and annul a declaration of acceleration and its consequences if (x) all existing Events of Default, other than the nonpayment of the principal of, premium, if any, and interest on the Notes that have become due solely by such declaration of acceleration, have been cured or waived and (y) the

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rescission would not conflict with any judgment or decree of a court of competent jurisdiction. For information as to the waiver of defaults, see “Modification and Waiver.”

The Holders of at least a majority in aggregate principal amount of the outstanding Notes may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee. However, the Trustee may refuse to follow any direction that conflicts with law or the Indenture, that may involve the Trustee in personal liability, or that the Trustee determines in good faith may be unduly prejudicial to the rights of Holders of Notes not joining in the giving of such direction and may take any other action it deems proper that is not inconsistent with any such direction received from Holders of Notes. A Holder may not pursue any remedy with respect to the Indenture or the Notes unless:

(1) the Holder gives the Trustee written notice of a continuing Event of Default;

(2) the Holders of at least 25% in aggregate principal amount of outstanding Notes make a written request to the Trustee to pursue the remedy;

(3) such Holder or Holders offer the Trustee indemnity satisfactory to the Trustee against any costs, liability or expense;

(4) the Trustee does not comply with the request within 60 days after receipt of the request and the offer of indemnity; and

(5) during such 60-day period, the Holders of a majority in aggregate principal amount of the outstanding Notes do not give the Trustee a direction that is inconsistent with the request.

However, such limitations do not apply to the right of any Holder of a Note to receive payment of the principal of, premium, if any, or interest on, such Note or to bring suit for the enforcement of any such payment, on or after the due date expressed in the Notes, which right shall not be impaired or affected without the consent of the Holder.

Officers of the Company must certify, on or before a date not more than 120 days after the end of each fiscal year, that a review has been conducted of the activities of the Company and its Restricted Subsidiaries and the Company’s and its Restricted Subsidiaries’ performance under the Indenture and that, to their knowledge, the Company has fulfilled all obligations thereunder, or, if there has been a default in the fulfillment of any such obligation, specifying each such default and the nature and status thereof. The Company will also be obligated to notify the Trustee of any default or defaults in the performance of any covenants or agreements under the Indenture.

Legal Defeasance and Covenant Defeasance

The Company may at any time, at the option of its Board of Directors evidenced by a resolution set forth in an officers’ certificate, elect to have all of its obligations discharged with respect to the outstanding Notes and all obligations of the Guarantors discharged with respect to their Note Guarantees (“Legal Defeasance”) except for:

(1) the rights of holders of outstanding Notes to receive payments in respect of the principal of, or interest or premium and Additional Interest, if any, on, such Notes when such payments are due from the trust referred to below;

(2) the Company’s obligations with respect to the Notes concerning issuing temporary notes, registration of Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency for payment and money for security payments held in trust;

(3) the rights, powers, trusts, duties and immunities of the Trustee, and the Company’s and the Guarantors’ obligations in connection therewith; and

(4) the Legal Defeasance and Covenant Defeasance provisions of the Indenture.

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In addition, the Company may, at its option and at any time, elect to have the obligations of the Company and the Guarantors released with respect to certain covenants (including its obligation to make Change of Control Offers and Asset Sale Offers) that are described in the Indenture (“Covenant Defeasance”) and thereafter any omission to comply with those covenants will not constitute a Default or Event of Default with respect to the Notes. In the event Covenant Defeasance occurs, certain events (not including non-payment, bankruptcy, receivership, rehabilitation and insolvency events) described under “Events of Default” will no longer constitute an Event of Default with respect to the Notes.

In order to exercise either Legal Defeasance or Covenant Defeasance:

(1) the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the holders of the Notes, cash in U.S. dollars, non-callable Government Securities, or a combination of cash in U.S. dollars and non-callable Government Securities, in amounts as will be sufficient, in the opinion of a nationally recognized investment bank, appraisal firm or firm of independent public accountants, to pay the principal of, or interest and premium and Liquidated Damages, if any, on, the outstanding Notes on the stated date for payment thereof or on the applicable redemption date, as the case may be, and the Company must specify whether the Notes are being defeased to such stated date for payment or to a particular redemption date;

(2) in the case of Legal Defeasance, the Company must deliver to the Trustee an opinion of counsel reasonably acceptable to the Trustee confirming that (a) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (b) since the date of the Indenture, there has been a change in the applicable United States federal income tax law, in either case to the effect that, and based thereon such opinion of counsel will confirm that, the holders of the outstanding Notes will not recognize income, gain or loss for United States federal income tax purposes as a result of such Legal Defeasance and will be subject to United States federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;

(3) in the case of Covenant Defeasance, the Company must deliver to the Trustee an opinion of counsel reasonably acceptable to the Trustee confirming that the holders of the outstanding Notes will not recognize income, gain or loss for United States federal income tax purposes as a result of such Covenant Defeasance and will be subject to United States federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

(4) no Default or Event of Default has occurred and is continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit) and the deposit will not result in a breach or violation of, or constitute a default under, any other instrument to which the Company or any Guarantor is a party or by which the Company or any Guarantor is bound;

(5) such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than the Indenture) to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound;

(6) the Company must deliver to the Trustee an officers’ certificate stating that the deposit was not made by the Company with the intent of preferring the holders of Notes over the other creditors of the Company with the intent of defeating, hindering, delaying or defrauding any creditors of the Company or others; and

(7) the Company must deliver to the Trustee an officers’ certificate and an opinion of counsel, each stating that all conditions precedent relating to the Legal Defeasance or the Covenant Defeasance have been complied with.

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Satisfaction and Discharge

The Indenture will be discharged and will cease to be of further effect as to all Notes issued thereunder, when:

(1) either:

(a) all Notes that have been authenticated, except lost, stolen or destroyed Notes that have been replaced or paid and Notes for whose payment money has been deposited in trust and thereafter repaid to the Company, have been delivered to the Trustee for cancellation; or

(b) all Notes that have not been delivered to the Trustee for cancellation have become due and payable by reason of the mailing of a notice of redemption or otherwise or will become due and payable within one year and the Company or any Guarantor has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust solely for the benefit of the holders, cash in U.S. dollars, non-callable Government Securities, or a combination of cash in U.S. dollars and non-callable Government Securities, in amounts as will be sufficient, without consideration of any reinvestment of interest, to pay and discharge the entire Indebtedness on the Notes not delivered to the Trustee for cancellation for principal, premium and Liquidated Damages, if any, and accrued interest to the date of maturity or redemption;

(2) no Default or Event of Default has occurred and is continuing on the date of the deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit and the grant on any lien securing such borrowing) and the deposit will not result in a breach or violation of, or constitute a default under, any other instrument to which the Company or any Guarantor is a party or by which the Company or any Guarantor is bound;

(3) the Company or any Guarantor has paid or caused to be paid all sums payable by it under the Indenture; and

(4) the Company has delivered irrevocable instructions to the Trustee under the Indenture to apply the deposited money toward the payment of the Notes at maturity or on the redemption date, as the case may be.

In addition, the Company must deliver an officers’ certificate and an opinion of counsel to the Trustee stating that all conditions precedent to satisfaction and discharge have been satisfied.

Modification and Waiver

The Indenture may be amended, without the consent of any Holder, to:

(1) cure any ambiguity, defect, mistake or inconsistency in the Indenture;

(2) comply with the provisions described under “Consolidation, Merger and Sale of Assets” or “Limitation on Guarantees by Restricted Subsidiaries”;

(3) comply with any requirements of the SEC in connection with the qualification of the Indenture under the Trust Indenture Act;

(4) evidence and provide for the acceptance of appointment by a successor Trustee;

(5) make any change that, in the good faith opinion of the Board of Directors, does not materially and adversely affect the rights of any Holder;

(6) enter into additional or supplemental Security Documents;

(7) make, complete or confirm any Note Guarantee or any grant of Collateral permitted or required by the Indenture or any of the Security Documents or release Collateral in accordance with the terms of the Indenture and the Security Documents;

(8) provide for uncertificated Notes in addition to or in replacement of certificated Notes;

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(9) evidence the succession of another Person to the Company or any Guarantor and the assumption by any such successor of the covenants of the Company of such Guarantor to the Indenture, the Guarantees and the Security Documents and in the Notes;

(10) add to the covenants of the Company for the benefit of the Holders, or to surrender any right or power conferred upon the Company;

(11) to add additional Events of Default;

(12) to provide for or confirm the issuance of additional notes in accordance with the terms of the Indenture;

(13) add to the Collateral securing the Notes, to add a Guarantor or to release a Guarantor in accordance with the terms of the Indenture; or

(14) conform the text of the Indenture, the Notes or the Security Documents to any provision of this “Description of the Exchange Notes.”

Modifications and amendments of the Indenture may be made by the Company and the Trustee with the consent of the Holders of not less than a majority in aggregate principal amount of the outstanding Notes; provided, however, that no such modification or amendment may, without the consent of each Holder affected thereby:

(1) change the Stated Maturity of the principal of, or any installment of interest on, any Note;

(2) reduce the principal amount of, or premium, if any, or interest on, any Note;

(3) change the optional redemption dates or optional redemption prices of the Notes from that stated under the caption “Optional Redemption”;

(4) change the place or currency of payment of principal of, or premium, if any, or interest on, any Note;

(5) impair the right to institute suit for the enforcement of any payment on or after the Stated Maturity (or, in the case of a redemption, on or after the Redemption Date) of any Note;

(6) waive a default in the payment of principal of, premium, if any, or interest on the Notes; or

(7) reduce the percentage or aggregate principal amount of outstanding Notes the consent of whose Holders is necessary for waiver of compliance with certain provisions of the Indenture or for waiver of certain defaults.

In addition, without the consent of at least two-thirds in aggregate principal amount of Notes then-outstanding, an amendment or waiver may not modify any Collateral Document relating to the Notes or the provisions of the Indenture dealing with the Security Documents that has the effect of releasing all or substantially all of the Collateral, except as otherwise permitted by the Indenture or the Security Documents.

No Personal Liability of Incorporators, Stockholders, Officers, Directors, or Employees

No recourse for the payment of the principal of, premium, if any, or interest on any of the Notes or for any claim based thereon or otherwise in respect thereof, and no recourse under or upon any obligation, covenant or agreement of the Company in the Indenture, or in any of the Notes or because of the creation of any Indebtedness represented thereby, shall be had against any incorporator, stockholder, officer, director, employee or controlling person of the Company or of any successor Person thereof. Each Holder, by accepting the Notes, waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Notes. Such waiver may not be effective to waive liabilities under the federal securities laws.

Concerning the Trustee

Except during the continuance of an Event of Default, the Trustee will not be liable, except for the performance of such duties as are specifically set forth in the Indenture. If an Event of Default has occurred

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and is continuing, the Trustee will use the same degree of care and skill in its exercise of the rights and powers vested in it under the Indenture as a prudent person would exercise under the circumstances in the conduct of such person’s own affairs.

The Indenture and provisions of the Trust Indenture Act of 1939, as amended, incorporated by reference therein contain limitations on the rights of the Trustee, should it become a creditor of the Company, to obtain payment of claims in certain cases or to realize on certain property received by it in respect of any such claims, as security or otherwise. The Trustee is permitted to engage in other transactions; provided, however, that if it acquires any conflicting interest, as defined by the Trust Indenture Act of 1939, it must eliminate such conflict or resign, as provided in the Trust Indenture Act of 1939.

Neither the Trustee nor the Collateral Agent shall be responsible for or make any representation as to the existence, genuineness, value or protection of any Collateral, for the legality, effectiveness or sufficiency of any Security Document, or for the creation, perfection, priority, sufficiency or protection of any Liens securing the Notes and Note Obligations. Neither the Trustee nor the Collateral Agent shall be responsible for filing any financing or continuation statements or recording any documents or instruments in any public office at any time or times or otherwise perfecting or maintaining the perfection of any Lien or security interest in the Collateral.

Governing Law

The Indenture is, and the old notes are, governed by, and construed in accordance with, the laws of the State of New York.

Book-Entry; Delivery and Form

The old notes were offered and sold to qualified institutional buyers in reliance on Rule 144A under the Securities Act. Old notes also may be offered and sold in reliance on Regulation S. In addition, Notes may subsequently be transferred to institutional accredited investors within the meaning of subparagraph (a)(1), (2), (3) or (7) of Rule 501 under the Securities Act in transactions exempt from registration under the Securities Act not made in reliance on Rule 144A or Regulation S under the Securities Act.

Rule 144A Notes initially will be represented by one or more Notes in registered, global form without interest coupons. The Rule 144A global note will be deposited upon issuance with the Trustee as custodian for The Depository Trust Company, also referred to as DTC, and registered in the name of DTC or its nominee, in each case for credit to an account of a direct or indirect participant as described below.

Regulation S Notes initially will be represented by one or more Notes in registered, global form without interest coupons. The Regulation S global note will be deposited upon issuance with the Trustee as custodian for DTC, and registered in the name of a nominee of DTC, in each case for credit to the accounts of Euroclear System and Clearstream Banking, S.A. of Luxembourg. On or prior to the 40th day after the later of the commencement of the offering of the old notes and the issue date of the old notes (such period through and including such 40th day, the “Restricted Period”), beneficial interests in the Regulation S Note may be held only through Euroclear or Clearstream, as indirect participants in DTC, unless transferred to a person that takes delivery in the form of an interest in the corresponding Rule 144A global note in accordance with the certification requirements described below. Beneficial interests in the Rule 144A global note may not be exchanged for beneficial interests in the Regulation S global note at any time except in the limited circumstances described below. See “— Exchanges Between Regulation S Notes and Rule 144A Notes and Other Notes.”

Except as set forth below, the global notes may be transferred, in whole but not in part, only to another nominee of DTC or to a successor of DTC or its nominee. Beneficial interests in the global notes may be exchanged for Notes in certificated form as described below. See “— Exchange of Book-Entry Notes for Certificated Notes.”

Global notes and Notes held by institutional accredited investors will be subject to certain restrictions on transfer and will bear a restrictive legend. In addition, transfer of beneficial interests in the global notes will

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be subject to the applicable rules and procedures of DTC and its direct or indirect participants (including, if applicable, those of Euroclear and Clearstream), which may change from time to time.

The Notes may be presented for registration of transfer and exchange at the offices of the registrar.

Depositary Procedures

DTC has advised the Company that DTC is a limited-purpose trust company created to hold securities for its participating organizations and to facilitate the clearance and settlement of transactions in those securities between the participants through electronic book-entry changes in accounts of the participants. The participants include securities brokers and dealers (including the initial purchasers), banks, trust companies, clearing corporations and certain other organizations. Access to DTC’s system is also available to other entities such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant, either directly or indirectly. Persons who are not participants may beneficially own securities held by or on behalf of DTC only through the participants or the indirect participants. The ownership interest and transfer of ownership interest of each actual purchaser of each security held by or on behalf of DTC are recorded on the records of the participants and the indirect participants.

DTC has also advised the Company that, pursuant to procedures established by it,

(1) upon deposit of the global notes, DTC will credit the accounts of participants designated by the beneficiaries with portions of the principal amount of the global notes, and

(2) ownership of such interests in the global notes will be shown on, and the transfer of ownership thereof will be effected only through, records maintained by DTC (with respect to the participants) or by the participants and the indirect participants (with respect to other owners of beneficial interests in the global notes).

Investors in the Rule 144A global note may hold their interests therein directly through DTC if they are participants in such system, or indirectly through organizations (including Euroclear and Clearstream) which are participants in such system. Investors in the Regulation S global note must initially hold their interests therein through Euroclear or Clearstream if they are accountholders in such systems or indirectly through organizations which are accountholders in such systems. After the expiration of the Restricted Period (but not earlier), investors may also hold interests in the Regulation S global note through organizations other than Euroclear and Clearstream that are participants in the DTC system. Euroclear and Clearstream will hold interests in the Regulation S global note on behalf of their participants through their respective depositories, which in turn will hold such interests in the Regulation S global note customers’ securities accounts in their respective names on the books of DTC. Morgan Guaranty Trust Company of New York, Brussels office, will initially act as depository for Euroclear, and Citibank, N.A., will initially act as depository for Clearstream. All interests in a global note, including those held through Euroclear or Clearstream, may be subject to the procedures and requirements of DTC. Those interests held through Euroclear or Clearstream may also be subject to the procedures and requirements of such system.

The laws of some states require that certain persons take physical delivery in definitive form of securities that they own. Consequently, the ability to transfer beneficial interests in a global note to such persons may be limited to that extent. Because DTC can act only on behalf of the participants, which in turn act on behalf of the indirect participants and certain banks, the ability of a person having beneficial interests in a global note to pledge such interests to persons or entities that do not participate in the DTC system or otherwise take actions in respect of such interests, may be affected by the lack of a physical certificate evidencing such interests. For certain other restrictions on the transferability of the Notes, see “Exchange of Book-Entry Notes for Certificated Notes” and “Exchanges Between Regulation S Notes and Rule 144A Notes and Other Notes.”

Except as described below, owners of interests in the global notes will not have Notes registered in their names, will not receive physical delivery of Notes in certificated form and will not be considered the registered owners or holders thereof under the Indenture for any purpose.

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Payments in respect of the principal of (and premium, if any) and interest on a global note registered in the name of DTC or its nominee will be payable to DTC or its nominee in its capacity as the registered holder under the Indenture. Under the terms of the Indenture, the Company and the Trustee, will treat the persons in whose names the Notes, including the global notes, are registered as the owners thereof for the purpose of receiving such payments and for any and all other purposes whatsoever. Consequently, none of the Company, the placement agents, the Trustee nor any agent of the Company, the placement agents or the Trustee has or will have any responsibility or liability for (1) any aspect or accuracy of DTC’s records or any participant’s or indirect participant’s records relating to the beneficial ownership or (2) any other matter relating to the actions and practices of DTC or any of the participants or the indirect participants.

The Company understands that DTC’s current practice, upon receipt of any payment in respect of securities such as the Notes (including principal and interest), is to credit the accounts of the relevant participants with the payment on the payment date, in amounts proportionate to their respective holdings in principal amount of beneficial interests in the relevant security as shown on the records of DTC. Payments by the participants and the indirect participants to the beneficial owners of Notes will be governed by standing instructions and customary practices and will not be the responsibility of DTC, the Trustee or the Company. None of the Company nor the Trustee will be liable for any delay by DTC or any of the participants in identifying the beneficial owners of the Notes, and the Company and the Trustee may conclusively rely on and will be protected in relying on instructions from DTC or its nominee as the registered owner of the global notes for all purposes.

Except for trades involving only Euroclear and Clearstream participants, interests in the global notes will trade in DTC’s same-day funds settlement system and secondary market trading activity in such interests will therefore settle in immediately available funds, subject in all cases to the rules and procedures of DTC and the participants.

Transfers between participants in DTC will be effected in accordance with DTC’s procedures and will be settled in same-day funds. Transfers between accountholders in Euroclear and Clearstream will be effected in the ordinary way in accordance with their respective rules and operating procedures.

Subject to compliance with the transfer restrictions applicable to the Notes described herein, cross-market transfers between the accountholders in DTC on the one hand and directly or indirectly through Euroclear or Clearstream accountholders, on the other hand, will be effected through DTC in accordance with DTC’s rules on behalf of Euroclear or Clearstream, as the case may be, by its respective depository; however, such cross-market transactions will require delivery of instructions to Euroclear or Clearstream, as the case may be, by the counterparty in such system in accordance with the rules and procedures and within the established deadlines (Brussels time) of such system. Euroclear or Clearstream, as the case may be, will, if the transaction meets its settlement requirements, deliver instructions to its respective depository to take action to effect final settlement on its behalf by delivering or receiving interests in the relevant global note in DTC, and making or receiving payment in accordance with normal procedures for same-day funds settlement applicable to DTC. Euroclear or Clearstream accountholders may not deliver instructions directly to the depositories for Euroclear or Clearstream.

Because of time zone differences, the securities account of a Euroclear or Clearstream accountholder purchasing an interest in a global note from an accountholder in DTC will be credited, and any such crediting will be reported to the relevant Euroclear or Clearstream participant, during the securities settlement processing day (which must be a business day for Euroclear or Clearstream) immediately following the settlement date of DTC. Cash received in Euroclear or Clearstream as a result of sales of interests in a global note by or through a Euroclear or Clearstream accountholder to a participant in DTC will be received with value on the settlement date of DTC but will be available in the relevant Euroclear or Clearstream cash account only as of the business day for Euroclear or Clearstream following DTC’s settlement date.

The Company understands that DTC will take any action permitted to be taken by a holder of Notes only at the direction of one or more participants in whose account with DTC interests in the global notes are credited and only in respect of such portion of the aggregate principal amount at maturity of the notes as to which such participant or participants has or have given such direction. However, if any of the events

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described under “Exchange of Book-Entry Notes for Certificated Notes” occurs, DTC reserves the right to exchange the global notes for (in the case of a Rule 144A global note) legended notes in certificated form and to distribute such notes to its participants.

The information in this section concerning DTC, Euroclear and Clearstream and their book-entry systems has been obtained from sources that the Company believes to be reliable, but the Company takes no responsibility for the accuracy thereof.

Although DTC, Euroclear and Clearstream have agreed to the foregoing procedures to facilitate transfers of interests in the Regulation S global note and in the Rule 144A global note among accountholders in DTC and accountholders of Euroclear and Clearstream, they are under no obligation to perform or to continue to perform such procedures, and such procedures may be discontinued at any time. None of the Company, the placement agents or the Trustee nor any agent of the Company, the placement agents or the Trustee will have any responsibility for the performance by DTC, Euroclear or Clearstream or their respective participants, indirect participants or accountholders of their respective obligations under the rules and procedures governing their operations.

Exchange of Book-Entry Notes for Certificated Notes

A global note is exchangeable for definitive Notes in registered certificated form if:

(1) DTC (A) notifies the Company that it is unwilling or unable to continue as depository for the global note and the Company thereupon fails to appoint a successor depository or (B) has ceased to be a clearing agency registered under the Exchange Act;

(2) the Company, at its option, notifies the Trustee in writing that it elects to cause the issuance of the Notes in certificated form (DTC has advised the Company that, in such event, under its current practices, DTC would notify its participants of the Company’s request, but will only withdraw beneficial interests from a global note at the request of each DTC participant); or

(3) there shall have occurred and be continuing a Default or an Event of Default with respect to the Notes.

Holders of an interest in a global note may receive certificated Notes, which may bear the legend relevant to it in accordance with DTC’s rules and procedures in addition to those provided for under the Indenture. Certificated notes delivered in exchange for any global note or beneficial interests therein will be registered in the names, and issued in any approved denominations, requested by or on behalf of DTC (in accordance with its customary procedures) and will bear, in the case of a restricted global note, a restrictive legend unless the Company determines otherwise in compliance with applicable law.

Exchanges Between Regulation S Notes and Rule 144A Notes and Other Notes

Prior to the expiration of the restricted period, a beneficial interest in a Regulation S global note may be transferred to a person who takes delivery in the form of an interest in the corresponding Rule 144A global note only upon receipt by the Trustee of a written certification from the transferor to the effect that such transfer is being made (1) (A) to a person whom the transferor reasonably believes is a qualified institutional buyer in a transaction meeting the requirements of Rule 144A or (B) pursuant to another exemption from the registration requirements under the Securities Act which is accompanied by an Opinion of Counsel regarding the availability of such exemption, and (2) in accordance with all applicable securities laws of any state of the United States or any other jurisdiction.

Beneficial interests in the Rule 144A global note may be transferred to a person who takes delivery in the form of an interest in the Regulation S global note, whether before or after the expiration of the restricted period, only if the transferor first delivers to the Trustee a written certificate to the effect that such transfer is being made in accordance with Rule 903 or 904 of Regulation S or Rule 144 under the Securities Act (if

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available) and that, if such transfer occurs prior to the expiration of the restricted period, the interest transferred will be held immediately thereafter through Euroclear or Clearstream, Luxembourg.

Beneficial interests in a global note may be transferred to a person who takes delivery in the form of an accredited investor certificated Note only upon compliance with the procedures set forth in “Notice to Investors” in the offering memorandum under which such Notes were sold.

Any beneficial interest in one of the global notes that is transferred to a person who takes delivery in the form of an interest in another global note will, upon transfer, cease to be an interest in such global note and become an interest in such other global note and, accordingly, will thereafter be subject to all transfer restrictions and other procedures applicable to beneficial interests in such other global note for as long as it remains such an interest.

Transfers involving an exchange of a beneficial interest in the Regulation S global note for a beneficial interest in the Rule 144A global note or vice versa will be effected in DTC by means of an instruction originated by DTC through the DTC Deposit/Withdrawal as Custodian system. Accordingly, in connection with such transfer, upon notice from DTC through the Deposit/Withdrawal as Custodian system, appropriate adjustments will be made to reflect a decrease in the principal amount of the Regulation S global note and a corresponding increase in the principal amount of the Rule 144A global note or vice versa, as applicable.

Definitions

Set forth below are defined terms used in the covenants and other provisions of the Indenture. Reference is made to the Indenture for other capitalized terms used in this “Description of the Exchange Notes” for which no definition is provided.

“Acquired Indebtedness” means Indebtedness of a Person (1) existing at the time such Person becomes a Restricted Subsidiary or (2) assumed in connection with an acquisition of such Person’s assets.

“Affiliate” of any specified individual or entity, means (i) any other individual or entity who directly or indirectly controls or is controlled by or is under direct or indirect common control with the specified individual or entity or (ii) any individual or entity that beneficially owns 10% or more of the voting power of the Company’s Equity Interests (exclusive of any individual or entity that is permitted to report such ownership pursuant to Schedule 13G under the Securities Exchange Act of 1934). For the purposes of this definition, “control” of an entity means having the power to direct the management and policies of the entity directly or indirectly, whether through the ownership of voting securities, by contract or otherwise.

“After-Acquired Property” means any property of any Company or any Guarantor acquired after the Closing Date of a type that secures the obligations under the Indenture, the Notes, the Security Documents and other Pari Passu Secured Obligations.

“Applicable Authorized Representative” means (i) until the occurrence of the Non-Controlling Authorized Representative Enforcement Date (if any), the Controlling Authorized Representative and (ii) from and after the occurrence of the Non-Controlling Authorized Representative Enforcement Date, the Major Non-Controlling Authorized Representative.

“Applicable Premium” means, with respect to any Note on any redemption date, the excess of (A) the present value at such redemption date of (1) the redemption price of such Note at May 1, 2013 (such redemption price being set forth in the table above) plus (2) all required interest payments due on such Note through May 1, 2013 (excluding accrued but unpaid interest to the redemption date), computed using a discount rate equal to the Treasury Rate on such redemption date plus 50 basis points over (B) the then-outstanding principal amount of such Note.

“Asset Sale” means:

(1) the sale, conveyance or other disposition of any assets, other than sales, leases, sub-leases or other dispositions of inventory or other assets in the ordinary course of business; provided that the sale, conveyance or other disposition of all or substantially all of the assets of the Company and its

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Subsidiaries taken as a whole will be governed by the provisions of the terms of the Indenture described above under the caption “Repurchase at the Option of Holders — Change of Control” and/or the provisions described above under the caption “Consolidation, Merger and Sale of Assets” and not by the provisions of the “Repurchase at the Option of Holders — Asset Sales” covenant; or

(2) the issuance of Equity Interests by any of the Company’s Restricted Subsidiaries or the sale of Equity Interests in any of its Restricted Subsidiaries, other than such an issuance or sale to the Company or one or more of its Restricted Subsidiaries (other than director’s qualifying shares or shares required by applicable law to be held by a person other than the Company or a Restricted Subsidiary).

Notwithstanding the preceding, the following items shall not be deemed to be Asset Sales:

(1) any single transaction or series of related transactions that involves assets having a Fair Market Value of less than $3.0 million or in which the Company receives aggregate consideration of less than $3.0 million;

(2) a transfer of assets between or among the Company and any one or more of its Subsidiary Guarantors;

(3) an issuance or transfer of Equity Interests by a Restricted Subsidiary to the Company or to another Restricted Subsidiary;

(4) a Restricted Payment that is permitted by the covenant described above under the caption “Certain Covenants — Limitation on Restricted Payments” or a Permitted Investment;

(5) sales, disposals or replacement of obsolete, damaged or worn-out assets (including the abandonment or other disposition of intellectual property that is, in the reasonable judgment of the Company, no longer economically practicable to maintain or useful to the conduct of the business of the Company and its Restricted Subsidiaries taken as a whole);

(6) licenses and sublicenses by the Company and its Restricted Subsidiaries of software or intellectual property in the ordinary course of business;

(7) the surrender or waiver of contract rights or the settlement, release, or surrender of contract, tort or other claims;

(8) the granting of Liens not prohibited by the covenant described above under the caption “Liens;”

(9) the sale or other disposition of cash or Temporary Cash Investments;

(10) the sale or discount of accounts receivable in the ordinary course of business;

(11) dispositions resulting in insurance proceeds or condemnation awards;

(12) so long as no Event of Default has occurred and is continuing, the sale of the Hartland Property, provided that, if the aggregate proceeds from such sale are greater than of $7.5 million, any excess shall be deemed to be Excess Proceeds; and

(13) the sale of Permitted Investments (other than sales of Equity Interests of any of Restricted Subsidiaries) made by the Company or any Restricted Subsidiary after the date of the Indenture, if such Permitted Investments were (a) received in exchange for, or purchased out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock) or (b) received in the form of, or were purchased from the proceeds of, a substantially concurrent contribution of common equity capital to the Company.

“Asset Sale Offer” has the meaning assigned to that term in the Indenture.

“Attributable Debt” means in respect of a sale and leaseback transaction means, as of the time of determination, the present value (discounted at the rate per annum equal to the rate of interest implicit in the lease involved in such sale and leaseback transaction, as determined in good faith by the Company) of the obligation of the lessee thereunder for rental payments (excluding, however, any amounts required to be paid

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by such lessee, whether or not designated as rent or additional rent, on account of maintenance and repairs, insurance, taxes, assessments, water rates or similar charges or any amounts required to be paid by such lessee thereunder contingent upon the amount of sales or similar contingent amounts) during the remaining term of such lease (including any period for which such lease has been extended or may, at the option of the lessor, be extended). In the case of any lease which is terminable by the lessee upon the payment of a penalty, such rental payments shall also include the amount of such penalty, but no rental payments shall be considered as required to be paid under such lease subsequent to the first date upon which it may be so terminated.

“Authorized Representative” means (i) with respect to the Holders of the Notes and the Note Obligations, the Collateral Agent and (ii) in the case of any Series of Pari Passu Obligations (and the Pari Passu Secured Parties thereunder) that become subject to the Intercreditor Agreement after the Closing Date, the Authorized Representative named for such Series in the Intercreditor Agreement or the applicable Joinder Agreement.

“Average Life” means, at any date of determination with respect to any debt security, the quotient obtained by dividing (1) the sum of the products of (a) the number of years from such date of determination to the dates of each successive scheduled principal payment of such debt security and (b) the amount of such principal payment by (2) the sum of all such principal payments.

“Board of Directors” means, with respect to any Person, the Board of Directors, Board of Managers or similar governing body of such Person or any duly authorized committee of such Board of Directors.

“Capital Lease Obligation” means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at that time be required to be capitalized on a balance sheet in accordance with GAAP.

“Change of Control” means an event or series of events by which any of the following occurs:

(1) any “Person”, other than Merrick, Michael Ferro or their respective controlled Affiliates, is or becomes the “beneficial owner” directly or indirectly, of more than 50% of the total voting power of all outstanding classes of voting capital stock of the Company;

(2) the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of the Company and its Restricted Subsidiaries, taken as a whole, to any Person;

(3) the adoption of a plan relating to the liquidation or dissolution of the Company; or

(4) on any date, a majority of the Company’s Board of Directors does not consist of Persons (a) who were directors at the Closing Date (“Continuing Directors”) or (b) whose election or nomination as directors was approved by at least a majority of the directors then in office who are Continuing Directors or whose election or nomination was previously so approved. In the definition of Change of Control, “Person” has the same meaning given to it in Sections 13(d) and 14(d) of the Exchange Act, and “beneficial owner” or “beneficially owned” have the same meaning given to these terms in Rules l3d-3 and l3d-5 under the Exchange Act, except that a Person is deemed to have “beneficial ownership” of all shares that Person has the right to acquire, whether the right is exercisable immediately or only after the passage of time.

“Change of Control Offer” has the meaning assigned to that term in the Indenture.

“Closing Date” means April 28, 2010, the date on which the April 2010 notes were originally issued under the Indenture.

“Collateral” has the meaning set forth under “Collateral and Security — Collateral Generally.”

“Collateral Agent” means The Bank of New York Mellon Trust Company, N.A., in its capacity as “Collateral Agent” under the Guarantee and Collateral Agreement, the Indenture and the other Security Documents, and any successor thereto in such capacity.

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“Consolidated Cash Flow” means, with respect to any Person for any period, the Consolidated Net Income of such Person for such period plus without duplication:

(1) an amount equal to any provision for taxes based on income or profits of such Person and its Restricted Subsidiaries for such period, to the extent that such provision for taxes was deducted in computing such Consolidated Net Income; plus

(2) Fixed Charges of such Person and its Restricted Subsidiaries to the extent deducted in computing such Consolidated Net Income; plus

(3) depreciation, amortization (including amortization of goodwill and other intangibles but excluding amortization of prepaid cash expenses that were paid in a prior period) and other non-cash expenses, charges or accruals of such Person and its Restricted Subsidiaries (excluding such non-cash expense to the extent it represents an accrual or reserve for cash payments in any future period) for such period to the extent that such depreciation, amortization and other non-cash expenses, write-downs, charges or accruals were deducted in computing such Consolidated Net Income; minus

(4) non-cash items increasing such Consolidated Net Income for such period, other than items that were accrued in the ordinary course of business.

“Consolidated Net Income” means, with respect to any Person for any period, the aggregate of the Net Income of such Person and its Restricted Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP; provided that: (1) the Net Income (but not loss) of any Person that is not a Restricted Subsidiary or that is accounted for by the equity method of accounting shall be included only to the extent of the amount of dividends or distributions paid in cash to the specified Person or a Restricted Subsidiary thereof; (2) the negative impact to revenue as a result of the non-cash write down of deferred revenue required by purchase accounting and the cumulative effect of a change in accounting principles, any extraordinary gains or losses and any gains or losses realized in connection with an asset sale (including disposals of discontinued operations) shall be excluded; and (3) solely for the purposes of determining Consolidated Cash Flow, any net after-tax income or loss from discontinued operations shall be excluded.

Notwithstanding the foregoing, there shall be excluded from Consolidated Net Income that portion, if any, of the Net Income of any Restricted Subsidiary that is not permitted, directly or indirectly, to be paid by way of dividend, distribution or loan to stockholders of such Subsidiary by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary or its stockholders.

“Consolidated Net Tangible Assets” means, with respect to any Person, the total amount of assets of such Person and its Restricted Subsidiaries (less applicable depreciation, amortization and other valuation reserves), after deducting therefrom (1) all current liabilities of such Person and its Restricted Subsidiaries (excluding intercompany items) and (2) all goodwill, trade names, trademarks, patents, unamortized debt discount and expense and other like intangibles, all as set forth on the most recent quarterly or annual consolidated balance sheet of such Person and its Restricted Subsidiaries, prepared in conformity with GAAP.

“Controlling Authorized Representative” has the meaning set forth under “Intercreditor Agreement — Enforcement of Security Interests.”

“Controlling Secured Parties” means the Series of Pari Passu Secured Parties whose Authorized Representative is the Controlling Authorized Representative.

“Credit Facilities” means one or more debt facilities, commercial paper facilities or indentures, in each case with banks or other institutional lenders or a trustee providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables), letters of credit or similar obligations or issuances of notes, in each case, as amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time to time.

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“Default” means any event that is, or after notice or passage of time or both would be, an Event of Default.

“Designated Non-Cash Consideration” means the Fair Market Value of non-cash consideration received by the Company or any Guarantor in connection with an Asset Sale that is so designated as Designated Non-Cash Consideration pursuant to an Officer’s Certificate setting forth the basis of such valuation executed by the principal financial officers of the Company, less the amount of cash received in connection with a subsequent sale of, or collection on, such Designated Non-Cash Consideration.

“Disqualified Stock” means any Equity Interests that, by its terms (or by the terms of any security into which it is convertible, or for which it is exchangeable, in each case at the option of the holder thereof), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder thereof, in whole or in part, on or prior to the date that is 91 days after the date on which the Notes are or become due. Notwithstanding the preceding sentence, any Equity Interests that would constitute Disqualified Stock solely because the holders thereof have the right to require the Company to repurchase such Equity Interests upon the occurrence of a Change of Control or an Asset Sale shall not constitute Disqualified Stock if the terms of such Equity Interests provide that the Company may not repurchase or redeem any such Equity Interests pursuant to such provisions until after the Company complies with the covenants described above under the captions “Repurchase at the Option of Holders — Change of Control” or “Repurchase at the Option of Holders — Asset Sales.”

“Domestic Restricted Subsidiary” means (i) each Restricted Subsidiary of the Company organized or existing under the laws of the United States, any state thereof or the District of Columbia and (ii) any other Restricted Subsidiary that guarantees any Indebtedness under any Credit Facility.

“Equity Interests” means capital stock, limited liability company interests, partnership interests or other equity interests or equity securities, and all warrants, options or other rights to acquire such securities (but excluding any debt security that is convertible into, or exchangeable for, such equity interests or equity securities).

“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor statute or statutes thereto.

“Fair Market Value” means the price that would be paid in an arm’s-length transaction between an informed and willing seller under no compulsion to sell and an informed and willing buyer under no compulsion to buy; provided that any transaction involving consideration of $10.0 million or more, the Fair Market Value shall be determined in good faith by the Board of Directors, whose determination shall be conclusive if evidenced by a Board Resolution.

“Fixed Charge Coverage Ratio” means with respect to any specified Person for any period, the ratio of the Consolidated Cash Flow of such Person and its Restricted Subsidiaries for such period to the Fixed Charges of such Person for such period. In the event that the specified Person or any of its Restricted Subsidiaries incurs, assumes, Guarantees, redeems, repays or acquires any Indebtedness or issues, redeems or acquires preferred stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but prior to the date on which the event for which the calculation of the Fixed Charge Coverage Ratio is made (the “Calculation Date”), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such incurrence, assumption, Guarantee, redemption, repayment or acquisition of Indebtedness, or such issuance, redemption or acquisition of preferred stock, as if the same had occurred at the beginning of the applicable four-quarter reference period.

“Fixed Charges” means, with respect to any Person for any period, the sum, without duplication, of (1) the consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued; including, without limitation, amortization of debt issuance costs and original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers’ acceptance financings and net payments, if any, pursuant to Hedging Obligations; plus (2) the consolidated interest of such Person and its Restricted

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Subsidiaries that was capitalized during such period; plus (3) the imputed interest with respect to Attributable Debt created after the Closing Date; plus (4) the aggregate amount of interest in respect of Indebtedness that is Guaranteed or secured by the assets of the Company or its Restricted Subsidiaries; plus (5) the product of (a) all dividend payments made in cash or in Disqualified Stock, on any series of preferred stock of such Person or any of its Restricted Subsidiaries times (b) a fraction, the numerator of which is one and the denominator of which is one minus the then current combined federal, state and local statutory tax rate of such Person, expressed as a decimal, in each case, on a consolidated basis and in accordance with GAAP.

In addition, for purposes of calculating the Fixed Charge Coverage Ratio (1) acquisitions that have been made by the specified Person or any of its Restricted Subsidiaries, including through the purchase of assets or stock, mergers, liquidations or consolidations and including any related financing transactions, during the four-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date shall be calculated on a pro forma basis (including Pro Forma Cost Savings) as if they had occurred on the first day of the four-quarter reference period; (2) the Consolidated Cash Flow attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses disposed of prior to the Calculation Date, shall be excluded; and (3) the Fixed Charges attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses disposed of prior to the Calculation Date, shall be excluded, but only to the extent that the obligations giving rise to such Fixed Charges will not be obligations of the specified Person or any of its Subsidiaries following the Calculation Date.

“Foreign Restricted Subsidiary” means any Restricted Subsidiary of the Company other than a Domestic Restricted Subsidiary

“GAAP” means generally accepted accounting principles in the United States of America as in effect as of the Closing Date, including, without limitation, those set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as approved by a significant segment of the accounting profession.

“Government Securities” means securities that are (1) direct obligations of the United States of America for the payment of which its full faith and credit is pledged or (2) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either case, are not callable or redeemable at the option of the issuer thereof at any time prior to the Stated Maturity of the Notes, and shall also include a depository receipt issued by a bank or trust company as custodian with respect to any such Government Security or a specific payment of interest on or principal of any such Government Security held by such custodian for the account of the holder of a depository receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the Government Security or the specific payment of interest on or principal of the Government Security evidenced by such depository receipt.

“Guarantee” means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person (1) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness of such other Person (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services (unless such purchase arrangements are on arm’s-length terms and are entered into in the ordinary course of business), to take-or-pay, or to maintain financial statement conditions or otherwise) or (2) entered into for purposes of assuring in any other manner the obligee of such Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); provided that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. The term “Guarantee” used as a verb has a corresponding meaning.

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“Guarantee and Collateral Agreement” means that certain Guarantee and Collateral Agreement, dated as of the Closing Date, made by and among the Company, the Guarantors and the Collateral Agent, as amended, modified, renewed, restated or replaced, in whole or in part, from time to time, in accordance with its terms.

“Guarantors” means each Domestic Restricted Subsidiary of the Company on the Closing Date, and each other Person that is required to, or at the election of the Company does, become a Guarantor by the terms of the Indenture after the Closing Date, in each case, until such Person is released from its Note Guarantee in accordance with the terms of the Indenture.

“Hedging Obligations” means, with respect to any Person, the net obligations of such Person under (1) interest rate swap agreements, interest rate cap agreements and interest rate collar agreements; and (2) other agreements or arrangements designed to protect against fluctuations in interest rates, currency exchange rates or specific financial and other similar risks (including commodity risks).

“Indebtedness” means, with respect to any specified Person, any indebtedness of such Person, contingent or otherwise, in respect of:

(1) borrowed money;

(2) bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof), but excluding obligations with respect to letters of credit (including trade letters of credit) or similar obligations (such as bank Guarantees), entered into in the ordinary course of business of such Person (and not for borrowed money) to the extent such letters of credit or similar obligations are not drawn upon or, if drawn upon, to the extent such drawing is reimbursed no later than the fifth Business Day following receipt by such Person of a demand for reimbursement;

(3) banker’s acceptances;

(4) Capital Lease Obligations and Attributable Debt;

(5) the balance deferred and unpaid of the purchase price of any property, except any such balance that constitutes an accrued expense or trade payable; or

(6) any Hedging Obligations, other than Hedging Obligations incurred in the ordinary course of business for the purpose of fixing or hedging interest rate risk, foreign currency risk or specific financial and other similar risks (including commodity risks) and not for speculative purposes;

if and to the extent any of the preceding (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet of the specified Person prepared in accordance with GAAP.

In addition, the term “Indebtedness” includes all Indebtedness of others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness is assumed by the specified Person) and, to the extent not otherwise included, the Guarantee by such Person of any Indebtedness of any other Person.

The amount of any Indebtedness outstanding as of any date shall be:

(1) the accreted value thereof, in the case of any Indebtedness issued at a discount to par;

(2) with respect to any Hedging Obligations, the net amount payable if such agreements terminated at that time due to default by such Person;

(3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:

(a) the Fair Market Value of such assets at the date of determination; and

(b) the amount of the Indebtedness of the other Person; or

(4) except as provided above, the principal amount or liquidation preference thereof, in the case of any other Indebtedness.

“Indenture Documents” means the Notes, the Indenture and the Note Guarantees.

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“Intercompany Debt Obligations” means any Indebtedness of the Company or any of its Restricted Subsidiaries which is owed to the Company or any of its Wholly Owned Restricted Subsidiaries.

“Intercreditor Agreement” has the meaning set forth under section entitled “Intercreditor Agreement” in this “Description of the Exchange Notes.”

“Intercreditor Event of Default” means an “Event of Default” under and as defined in the Indenture or any other Pari Passu Agreement.

“Intervening Creditor” has the meaning set forth under “Intercreditor Agreement — Restrictions on Enforcement of Priority Liens.”

“Investment Grade” means (1) BBB- or above, in the case of S&P (or its equivalent under any successor Rating Categories of S&P) and Baa3 or above, in the case of Moody’s (or its equivalent under any successor Rating Categories of Moody’s), or (2) the equivalent in respect of the Rating Categories of any other Rating Agencies, in each case, without regard to outlook.

“Investments” means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the forms of direct or indirect loans (including Guarantees of Indebtedness or other obligations), advances or capital contributions (excluding commission, travel and similar advances to officers and employees made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, to the extent that such items are or would be classified as investments on a balance sheet prepared in accordance with GAAP. “Investments” shall also include (1) the designation of a Restricted Subsidiary as an Unrestricted Subsidiary and (2) the retention of the Equity Interests (or any other Investment) by the Company or any of its Restricted Subsidiaries, of (or in) any Person that has ceased to be a Restricted Subsidiary. For purposes of the definition of “Unrestricted Subsidiary” and the “Limitation on Restricted Payments” covenant, the amount of or a reduction in an Investment shall be equal to the Fair Market Value thereof at the time such Investment is made or reduced.

“Joinder Agreement” means an agreement in form and substance substantially similar to Exhibit A to the Intercreditor Agreement, pursuant to which an additional Series of Pari Passu Obligations become a party to the Intercreditor Agreement, in accordance with the applicable terms thereof.

“Lien” means any mortgage, lien, pledge, security interest, conditional sale or other title retention agreement, charge or other security interest or encumbrance of any kind, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement or any lease in the nature thereof; any option or other agreement to sell or give a security interest therein and any filing of, or agreement to file, any financing statement under the Uniform Commercial Code (or equivalent statutes of any jurisdiction).

“Major Non-Controlling Authorized Representative” has the meaning set forth under “Intercreditor Agreement — Enforcement of Security Interests.”

“Merrick” means Merrick RIS, LLC.

“Moody’s” means Moody’s Investors Service, Inc. and its successors.

“Net Cash Proceeds” means:

(a) with respect to any Asset Sale, means the aggregate cash proceeds received by the Company or any of its Restricted Subsidiaries (including, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of the direct costs relating to such Asset Sale, including, without limitation, legal, accounting and investment banking fees, and sales commissions, and any relocation expenses incurred as a result thereof, taxes paid or payable as a result thereof, in each case after taking into account any available tax credits or deductions, any tax sharing arrangements and amounts used to repay Indebtedness secured by a Lien on the asset or assets that were the subject of such Asset Sale and appropriate amounts to be provided by the Company or any Restricted Subsidiary as a reserve against any liabilities associated with such Asset Sale, including, without limitation, pension and other post-employment benefit liabilities, liabilities related to environmental

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matters and liabilities under any indemnification obligations associated with such Asset Sale, all as determined in conformity with GAAP; and

(b) with respect to any issuance or sale of Equity Interests, the proceeds of such issuance or sale in the form of cash or cash equivalents, including payments in respect of deferred payment obligations (to the extent corresponding to the principal, but not interest, component thereof) when received in the form of cash or cash equivalents and proceeds from the conversion of other property received when converted to cash or cash equivalents, net of attorney’s fees, accountants’ fees, underwriters’ or placement agents’ fees, discounts or commissions and brokerage, consultant and other fees incurred in connection with such issuance or sale and net of taxes paid or payable as a result thereof.

“Net Income” means, with respect to any Person, the net income (loss) of such Person and its Restricted Subsidiaries, determined in accordance with GAAP and before any reduction in respect of preferred stock dividends.

“Non-Controlling Authorized Representative Enforcement Date” has the meaning set forth under “Intercreditor Agreement — Enforcement of Security Interests.”

“Non-Controlling Secured Parties” means the Pari Passu Secured Parties that are not Controlling Secured Parties.

“Note Documents” means Indenture Documents.

“Note Obligations” means all Obligations in respect of the Notes or arising under the Indenture Documents. Note Obligations shall include all interest accrued (or which would, absent the commencement of an insolvency or liquidation proceeding, accrue) after the commencement of an insolvency or liquidation proceeding in accordance with and at the rate specified in the relevant Indenture Document whether or not the claim for such interest is allowed as a claim in such insolvency or liquidation proceeding.

“Obligations” means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness.

“Pari Passu Agreement” means any loan agreement, credit agreement, indenture or other agreement entered into by the Company after the Closing Date, if any, pursuant to which the Company or any of its Subsidiaries will incur Pari Passu Obligations.

“Pari Passu Debt” means (a) any Indebtedness of the Company that ranks equally in right of payment with the Notes or (b) any Indebtedness of a Guarantor that ranks equally in right of payment with such Guarantor’s Note Guarantee.

“Pari Passu Debt Collateral Agent” has the meaning set forth in the Intercreditor Agreement.

“Pari Passu Obligations” means, collectively, Note Obligations and each other Series of Permitted Pari Passu Obligations.

“Pari Passu Secured Parties” means, collectively, the Collateral Agent, the Notes Secured Parties (as defined below in the definition of “Series”), any secured parties holding any other Pari Passu Obligations, and each agent and trustee for such holders.

“Pari Passu Security Documents” means each security agreement, pledge agreement, deed of trust, mortgage and other agreement entered into in favor of any Pari Passu Debt Collateral Agent for purposes of securing the Pari Passu Obligations and each financing statement and other document or instrument delivered to create, perfect or continue the Liens thereby created.

“Permitted Business” means the provision of technology services to the healthcare industry businesses and related activities and services including any business conducted or proposed to be conducted by the Company and its Restricted Subsidiaries on the Closing Date as described in this prospectus, including businesses engaged in by Amicas, Inc. and its Subsidiaries, and other businesses related, ancillary or complementary thereto and reasonable expansions or extensions thereof.

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“Permitted Investments” means, for any Person, Investments made on or after the Closing Date consisting of:

(1) Investments by the Company, or by a Restricted Subsidiary thereof, in the Company or a Guarantor or in a Person, if as a result of such Investment (a) such Person becomes a Guarantor of the Company or (b) such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Company or any Guarantor;

(2) Temporary Cash Investments;

(3) an Investment that is made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to, and in compliance with, the covenant “Repurchase at the Option of Holders — Asset Sales”;

(4) Investments existing on the Closing Date;

(5) Investments of the Company or any Restricted Subsidiary in connection with Hedging Obligations that are incurred for the purpose of fixing or hedging interest rate risk or foreign currency risk and not for speculative purposes;

(6) Investments consisting of endorsements for collection or deposit in the ordinary course of business;

(7) Investments in suppliers or customers that are received in bankruptcy, receivership or similar proceedings or as a result of foreclosure on a secured Investment in a third party received in exchange for or cancellation of an existing obligation of such supplier or customer to the Company or a Restricted Subsidiary or received from the compromise or resolution of litigation, arbitration or other disputes;

(8) Investments solely in exchange for, or out of the net cash proceeds received from, the issuance of Equity Interests (other than Disqualified Stock) of the Company;

(9) deposits required by government agencies, public utilities or suppliers in the ordinary course of business;

(10) prepaid expenses incurred in the ordinary course of business;

(11) extensions of trade credit in the ordinary course of business recorded as accounts receivable;

(12) loans or advances to employees made in the ordinary course of business of the Company or any Restricted Subsidiary of the Company;

(13) repurchases of the Notes;

(14) any guarantee of Indebtedness permitted to be incurred by the covenant entitled “— Certain Covenants — Limitation on Indebtedness” other than a guarantee of Indebtedness of an Affiliate of the Company that is not a Restricted Subsidiary of the Company;

(15) Investments acquired after the Closing Date as a result of the acquisition by the Company or any Restricted Subsidiary of the Company of another Person, including by way of a merger, amalgamation or consolidation with or into the Company or any of its Restricted Subsidiaries in a transaction that is not prohibited by the covenant described above under the caption “— Merger, Consolidation or Sale of Assets” after the Closing Date to the extent that such Investments were not made in contemplation of such acquisition, merger, amalgamation or consolidation and were in existence on the date of such acquisition, merger, amalgamation or consolidation;

(16) Investments consisting of the licensing or contribution of intellectual property pursuant to joint marketing arrangements with other Persons; and

(17) Investments (other than Investments specified in clauses (1) through (16) above) in an aggregate amount, as valued at the time each such Investment is made, not to exceed 5.0% of Consolidated Net Tangible Assets at any time after the Closing Date.

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“Permitted Liens” means Liens that fit into any of the following categories:

(1) any Liens existing on the Closing Date;

(2) Liens on assets acquired after the Closing Date that were existing at the time of the acquisition by the Company or any Restricted Subsidiary thereof; provided such Liens were in existence prior to the contemplation of such acquisition and do not extend to any other assets;

(3) Liens to secure Indebtedness permitted by clause (6) of the definition of “Permitted Indebtedness” covering only the assets acquired with or financed by such Indebtedness;

(4) Liens securing Indebtedness (including Hedging Obligations with respect thereto) in an aggregate amount not to exceed $5.0 million; provided that such Liens are pari passu with or junior to the Notes;

(5) Liens on an entity or its assets existing at the time the entity becomes a Restricted Subsidiary or is merged with the Company or any of its Restricted Subsidiaries or assumed in connection with the acquisition of its assets; provided that such Liens were in existence prior to the contemplation of such acquisition or merger and do not extend to any assets other than those of the Person that becomes a Restricted Subsidiary or is merged with the Company;

(6) statutory liens of landlords and carriers’, warehousemen’s, mechanics’, suppliers’, materialmen’s, repairmen’s or other like Liens arising in the ordinary course of business;

(7) judgment Liens and other similar Liens not giving rise to an Event of Default so long as such Lien is adequately bonded and any appropriate legal proceedings which may have been duly initiated for the review of such judgment shall not have been finally terminated or the period within which such proceedings may be initiated shall not have expired;

(8) Liens securing Intercompany Debt Obligations;

(9) Liens for taxes, assessments or governmental charges not yet due and payable or being contested in good faith, provided that any reserve or other appropriate provision as shall be required in conformity with GAAP shall have been made therefor;

(10) Liens on foreign bank accounts in accordance with customary banking practice;

(11) licenses, entitlements, servitudes, easements, rights-of-way, restrictions, reservations, covenants, conditions, utility agreements, minor imperfections on title, minor survey defects and other similar encumbrances on the use of any real property that were not incurred in connection with Indebtedness and do not, in the aggregate, materially diminish the value of such properties or materially interfere with their use in the operation of the business of the Company or any of its Restricted Subsidiaries;

(12) Liens incurred or pledges or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other social security legislation;

(13) deposits and other Liens to secure letters of credit and bank Guarantees and the performance of bids, trade contracts (other than for borrowed money), leases, statutory obligations, surety and appeal bonds, performance bonds and other similar obligations incurred in the ordinary course of business;

(14) Liens created for the benefit of (or to secure) the April 2010 notes, the related Note Guarantees, and any other Indebtedness incurred under clause (7) of the definition of Permitted Indebtedness;

(15) Liens to secure Hedging Obligations incurred in the ordinary course of business for the purpose of fixing or hedging interest rate risk, foreign currency risk or financial and other similar risks (including commodity risks); provided that with respect to Hedging Obligations with respect to Indebtedness such Liens do not extend to property or assets other than the property or assets securing such Indebtedness;

(16) Liens in favor of customs and revenue authorities or freight forwarders or handlers to secure payment of custom duties incurred in the ordinary course of business;

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(17) leases, subleases or licenses and sublicenses granted to others that do not materially interfere with the ordinary course of business of the Company and its Restricted Subsidiaries;

(18) Liens arising from the filing of Uniform Commercial Code financing statements regarding leases;

(19) Liens in favor of the Company or a Restricted Subsidiary;

(20) Liens securing Permitted Refinancing Indebtedness; provided that (a) such Liens shall be limited to all or part of the same property and assets that secured or, under the written agreements pursuant to which the original Liens arose, could secure the original Liens (plus improvements and accessions to such property or proceeds or distributions thereof) and (b) the Indebtedness secured by such Liens at such time is not increased to any amount greater than the sum of (i) the outstanding principal amount or, if greater, committed amount of the Indebtedness at the time the original Lien became a Permitted Lien and (ii) an amount necessary to pay any fees and expenses, including premiums, related to such refinancing, refunding, extension, renewal or replacement;

(21) Liens of a collection bank arising under Section 4-210 of the New York Uniform Commercial Code on items in the course of collection in favor of banking institutions arising as a matter of law encumbering deposits (including the right of set-off) within general parameters customary in the banking industry;

(22) bankers’ Liens, rights of setoff, Liens arising out of judgments or awards not constituting an Event of Default and notices of lis pendens and associated rights related to litigation being contested in good faith by appropriate proceedings and for which adequate reserves have been made;

(23) any pledge of the Capital Stock of an Unrestricted Subsidiary to secure Indebtedness of such Unrestricted Subsidiary;

(24) deposits made in the ordinary course of business to secure liability to insurance carriers;

(25) Liens arising out of conditional sale, title retention, consignment or similar arrangements, or that are contractual rights of set-off, relating to the sale or purchase of goods entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of business;

(26) any encumbrance or restriction (including put and call arrangements) with respect to Capital Stock of any non-majority-owned joint venture or similar arrangement pursuant to any joint venture or similar agreement permitted under the Indenture;

(27) Liens on cash, Cash Equivalents or other property arising in connection with the defeasance, discharge or redemption of Indebtedness;

(28) Liens on specific items of inventory or other goods (and the proceeds thereof) of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created in the ordinary course of business for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;

(29) Liens on assets pursuant to merger agreements, stock or asset purchase agreements and similar agreements in respect of the disposition of such assets;

(30) Liens on Capital Stock issued by, or any property or assets of, any Foreign Subsidiary securing Indebtedness incurred by such Foreign Subsidiary or another Foreign Subsidiary that directly or indirectly owns such Capital Stock;

(31) Liens upon assets of the Company or any Restricted Subsidiary subject to any Sale and Leaseback Transaction permitted by the Indenture; and

(32) Liens not otherwise permitted by clauses (1) through (31) above which at any time secure Indebtedness or other obligations in an amount up to the greater of $5.0 million.

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“Permitted Pari Passu Obligations” means any obligation under any Additional Notes or any other Indebtedness (whether or not consisting of Additional Notes) equally and ratably secured on a first-lien basis with the Notes by Liens on the Collateral; provided that any such Lien, as of the date of incurrence of such Permitted Pari Passu Obligations, was permitted to be incurred under clause (4) of the definition of “Permitted Liens.”

“Permitted Refinancing Indebtedness” means any Indebtedness of the Company or any of its Restricted Subsidiaries issued in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge other Indebtedness of the Company or any of its Restricted Subsidiaries (other than Intercompany Debt Obligations); provided that:

(1) the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness renewed, refunded, refinanced, replaced, defeased or discharged (plus all accrued interest on the Indebtedness and the amount of all fees and expenses, including premiums, incurred in connection therewith);

(2) such Permitted Refinancing Indebtedness does not mature prior to the Stated Maturity of the Indebtedness to be refinanced or refunded, and the Average Life of such Permitted Refinancing Indebtedness, determined as of the date of incurrence of such Permitted Refinancing Indebtedness, is at least equal to the remaining Average Life of the Indebtedness to be refinanced or refunded;

(3) if the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged is subordinated in right of payment to the Notes, such Permitted Refinancing Indebtedness is subordinated in right of payment to, the Notes on terms at least as favorable to the Holders of Notes as those contained in the documentation governing the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged; and

(4) such Indebtedness is incurred either by the Company or by the Restricted Subsidiary who is the obligor on the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged.

“Person” means an individual, a corporation, a partnership, a limited liability company, a joint venture, an association, a trust, an unincorporated organization or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

“Pro Forma Cost Savings” means, with respect to any period, the reduction in net costs and related adjustments that are directly attributable to an acquisition that occurred during the four-quarter period or after the end of the four-quarter period and on or prior to the Calculation Date, and calculated on a basis that is consistent with Regulation S-X under the Securities Act as in effect and applied as of the date of the Indenture and are described in a certificate delivered to the Trustee from the Company’s Chief Financial Officer that outlines the specific actions taken and the net cost savings achieved or to be achieved from each such action.

“Rating Agencies” means (1) S&P and Moody’s or (2) if S&P or Moody’s or both of them are not making ratings publicly available with respect to the Notes for reasons outside of the control of the Company, a nationally recognized U.S. rating agency or agencies, as the case may be, selected by the Company, which will be substituted for S&P or Moody’s or both, as the case may be.

“Replacement Assets” means, on any date, property or assets (other than current assets) of a nature or type or that are used in a business (or an Investment in a company having property or assets of a nature or type, or engaged in a business) similar or related or complementary to the nature or type of the property and assets of, or the business of, the Company and its Restricted Subsidiaries existing on such date.

“Restricted Investment” means an Investment made after the Closing Date other than Permitted Investments.

“Restricted Payment” means the Company or any of its Restricted Subsidiaries, directly or indirectly, does any of the following: (1) either (a) declares or pays any dividend on or makes any distribution in respect of its Equity Interests or to the direct or indirect holders of its Equity Interests in their capacity as such (other than dividends or distributions payable in its Equity Interests (other than Disqualified Stock) or to the

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Company or any of its Restricted Subsidiaries), or (b) purchases, redeems or retires for value Equity Interests of the Company or any of its Restricted Subsidiaries (other than Equity Interests owned by the Company or any of its Restricted Subsidiaries); (2) makes any principal payment on or with respect to, or redeems, repurchases, defeases or otherwise acquires or retires for value prior to its scheduled maturity, scheduled repayment or scheduled sinking fund payment, any Indebtedness that is subordinated to the Notes or any Subsidiary Guarantee or (3) makes any Restricted Investment.

“Restricted Subsidiary” means any Subsidiary of the Company other than an Unrestricted Subsidiary.

“S&P” means Standard & Poor’s Ratings Group, a division of The McGraw-Hill Companies, and its successors.

“SEC” means the Securities and Exchange Commission.

“Secured Credit Documents” means, collectively, (i) the Indenture and Note Guarantees, and (ii) each loan agreement, credit agreement, indenture or other agreement entered into by the Company after the date of this Agreement, if any, pursuant to which the Company or any of its Subsidiaries will incur Pari Passu Obligations.

“Securities Act” means the Securities Act of 1933, as amended, or any successor statute or statutes thereto.

“Security Documents” means the Intercreditor Agreement, if any, the Guarantee and Collateral Agreement, and all other pledge agreements, collateral assignments, mortgages, collateral agency agreements, deeds of trust or other grants or transfers for security executed and delivered by the Issuer, a Guarantor or the Parent creating (or purporting to create) a Lien upon the Collateral as contemplated by the Indenture or the Guarantee and Collateral Agreement, in each case, as amended, modified, renewed, restated or replaced, in whole or in part, from time to time in accordance with its terms.

“Series” means (a) with respect to the Pari Passu Secured Parties, (i) the Holders of the Notes and the Trustee (in their capacities as such, the “Notes Secured Parties”) and (ii) the Pari Passu Secured Parties that become subject to the Intercreditor Agreement after the Closing Date and that are represented by a common Authorized Representative; and (b) with respect to any Pari Passu Obligations, each of the Note Obligations, and the Pari Passu Obligations incurred pursuant to any applicable agreement, which, in each case, pursuant to the Intercreditor Agreement or a Joinder Agreement, are to be represented under the Intercreditor Agreement by an Authorized Representative.

“Significant Subsidiary” means, at any date of determination, with respect to any Person, means any Subsidiary of such Person that satisfies the criteria for a “significant subsidiary” set forth in Rule 1-02(w) of Regulation S-X under the Exchange Act, but shall not include any Unrestricted Subsidiary.

“Stated Maturity” means, (1) with respect to any debt security, the date specified in such debt security as the fixed date on which the final installment of principal of such debt security is due and payable and (2) with respect to any scheduled installment of principal of or interest on any debt security, the date specified in such debt security as the fixed date on which such installment is due and payable.

“Subsidiary” means, with respect to any Person, any corporation or other entity more than fifty percent (50%) of whose Equity Interests having by the terms thereof, at that time, ordinary voting power to elect a majority of the directors (or comparable positions) of such entity is at the time owned by such Person directly or indirectly through Subsidiaries.

“Subsidiary Guarantor” means any Guarantor that is a Subsidiary.

“Temporary Cash Investments” means

(1) investments in marketable direct obligations issued or guaranteed by the United States of America, or of any governmental agency or political subdivision thereof, maturing within 365 days of the date of purchase;

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(2) repurchase obligations with a term of not more than seven (7) days for underlying securities of the types described in clauses (1) above entered into with any bank organized under the laws of the United States of America or any state thereof or the District of Columbia, in each case having capital and unimpaired surplus totaling more than $500,000,000 and rated at least A by S&P and A-2 by Moody’s;

(3) commercial paper or finance company paper issued by any Person incorporated under the laws of the United States or any state thereof and having one of the two highest ratings obtainable from Moody’s or S&P, in each case maturing within 365 days of purchase; and

(4) Investments not exceeding 365 days in duration in money market funds that invest substantially all of such funds’ assets in the Investments described in the preceding clauses (1) through (3).

“Treasury Rate” means, as of any redemption date, the yield to maturity as of such redemption date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two business days prior to the redemption date (or, if such statistical release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the redemption date to May 1, 2013; provided, however, that if the period from the redemption date to May 1, 2013 is not equal to the constant maturity of the United States Treasury security for which a weekly average yield is given, the Treasury Rate shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of United States Treasury securities for which such yields are given, except that if the period from such date of redemption to May 1, 2013 is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year shall be used.

“Unrestricted Subsidiary” means (1) any Subsidiary of the Company that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors in the manner provided below; and (2) any Subsidiary of an Unrestricted Subsidiary. The Board of Directors may designate any Restricted Subsidiary (including any newly acquired or newly formed Subsidiary of the Company) to be an Unrestricted Subsidiary unless such Subsidiary owns any Equity Interests of, or owns or holds any Lien on any property of, the Company or any Restricted Subsidiary; provided that (A) any Guarantee by the Company or any Restricted Subsidiary of any Indebtedness of the Subsidiary being so designated shall be deemed an “incurrence” of such Indebtedness and an “Investment” by the Company or such Restricted Subsidiary (or both, if applicable) at the time of such designation; (B) either (I) the Subsidiary to be so designated has total assets of $1,000 or less or (II) if such Subsidiary has assets greater than $1,000, such designation would be permitted under the “Limitation on Restricted Payments” covenant and (C) if applicable, the incurrence of Indebtedness and the Investment referred to in clause (A) of this proviso would be permitted under the “Limitation on Indebtedness” and “Limitation on Restricted Payments” covenants. The Board of Directors may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that (a) no Default or Event of Default shall have occurred and be continuing at the time of or after giving effect to such designation and (b) all Liens and Indebtedness of such Unrestricted Subsidiary outstanding immediately after such designation would, if incurred at such time, have been permitted to be incurred (and shall be deemed to have been incurred) for all purposes of the Indenture. Any such designation by the Board of Directors shall be evidenced to the Trustee by promptly filing with the Trustee a copy of the Board Resolution giving effect to such designation and an Officers’ Certificate certifying that such designation complied with the foregoing provisions.

“Wholly Owned” means, with respect to any Subsidiary of any Person, the ownership of all of the outstanding capital stock of such Subsidiary (other than any director’s qualifying shares or Investments by foreign nationals mandated by applicable law) by such Person or one or more Wholly Owned Subsidiaries of such Person.

UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

The following summary describes U.S. federal income tax considerations relating to the exchange of old notes for exchange notes and the ownership and disposition of the exchange notes, but does not purport to be a complete analysis of all potential tax effects. This summary is based on the Internal Revenue Code of 1986,

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as amended (the “Code”), Treasury Regulations, judicial decisions, published positions of the Internal Revenue Service (the “IRS”), and other applicable authorities, all as in effect as of the date hereof and all of which are subject to change or differing interpretations (possibly with retroactive effect).

The discussion does not address all of the tax consequences that may be relevant to a particular person or to persons subject to special treatment under U.S. federal income tax laws (such as financial institutions, broker-dealers, insurance companies, regulated investment companies, real estate investment trusts, cooperatives, traders in securities who elect to apply a mark-to-market method of accounting, persons that have a functional currency other than the U.S. dollar, expatriates, tax-exempt organizations, or persons that are, or hold their notes through, partnerships or other pass-through entities), or to persons who hold the notes as part of a straddle, hedge, conversion, synthetic security, or constructive sale transaction for U.S. federal income tax purposes, all of whom may be subject to tax rules that differ from those summarized below. In addition, this discussion does not address the consequences of the alternative minimum tax, or any state, local or foreign tax consequences or any tax consequences other than U.S. federal income tax consequences. This summary deals only with persons who hold the notes as capital assets within the meaning of the Code (generally, property held for investment). Holders are urged to consult their tax advisors as to the particular U.S. federal tax consequences to them of the acquisition, ownership and disposition of notes, as well as the effects of state, local and non-U.S. tax laws.

For purposes of this summary, a “U.S. holder” means a beneficial owner of a note (as determined for U.S. federal income tax purposes) that is, or is treated as, a citizen or individual resident of the U.S., a corporation created or organized in the U.S. or under the laws of the U.S. or any political subdivision thereof or the District of Columbia, an estate the income of which is subject to U.S. federal income taxation regardless of its source, or a trust if (1) a court within the U.S. is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust, or (2) the trust has a valid election in effect to be treated as a U.S. person. A “non-U.S. holder” means any beneficial owner (other than a partnership or other pass-through entity for U.S. federal income tax purposes) that is not a “U.S. holder.”

If a partnership (including any entity treated as a partnership or other pass-through entity for U.S. federal income tax purposes) is a holder of a note, the U.S. federal income tax treatment of a partner in the partnership will generally depend on the status of the partner and the activities of such partnership. Partners and partnerships should consult their tax advisors as to the particular U.S. federal income tax consequences applicable to them.

TO ENSURE COMPLIANCE WITH TREASURY DEPARTMENT CIRCULAR 230, HOLDERS OF NOTES ARE HEREBY NOTIFIED THAT: (A) ANY DISCUSSION OF FEDERAL TAX ISSUES IN THIS PROSPECTUS IS NOT INTENDED OR WRITTEN TO BE RELIED UPON, AND CANNOT BE RELIED UPON, BY HOLDERS FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED ON HOLDERS UNDER THE INTERNAL REVENUE CODE; (B) SUCH DISCUSSION IS BEING USED IN CONNECTION WITH THE PROMOTION OR MARKETING (WITHIN THE MEANING OF CIRCULAR 230) BY US OF THE TRANSACTIONS OR MATTERS ADDRESSED HEREIN; AND (C) HOLDERS SHOULD SEEK ADVICE BASED ON THEIR PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.

Qualified Reopening

We will treat the notes as having been issued in a “qualified reopening” for United States federal income tax purposes, and the following discussion assumes such treatment will be respected. Consequently, the new notes will be part of the same issue as the existing notes. Because the existing notes were issued with original issue discount (“OID”) for United States federal income tax purposes, the new notes also will have OID. However, as discussed in further detail below under “— U.S. Holders — Amortizable Premium,” since the initial offering price of the new notes is greater than their stated principal amount, investors who purchased new notes pursuant to the offering at their initial offering price will not be required to include any OID in income for United States federal income tax purposes.

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Pre-issuance Accrued Interest

The initial offering price for the notes will include amounts attributable to interest accrued from May 1, 2011, which we call “pre-issuance accrued interest.” Pre-issuance accrued interest will be included in the accrued interest to be paid on the notes on the first interest payment date after the issuance of the notes. In accordance with applicable United States Treasury regulations, for United States federal income tax purposes, we will treat the notes as having been purchased for a price that does not include any pre-issuance accrued interest. If the notes are so treated, the portion of the first stated interest payment equal to the pre-issuance accrued interest will be deemed to be a non-taxable return of capital and, accordingly, will not be taxable as interest on the notes.

Exchange Offer

The exchange of old notes for exchange notes pursuant to the exchange offer should not constitute a taxable event for U.S. federal income tax purposes. As a result, (1) a holder should not recognize a taxable gain or loss as a result of exchanging such holder’s old notes for exchange notes; (2) the holding period of the exchange notes should include the holding period of the old notes exchanged therefor; (3) the adjusted tax basis of the exchange notes should be the same as the adjusted tax basis of the old notes exchanged therefor immediately before such exchange; and (4) the “adjusted issue price” (defined below under “U.S. Holders — Original Issue Discount) of the exchange notes will be the same as the adjusted issue price of the old notes exchanged therefor immediately before such exchange.

U.S. Holders

Stated Interest.  Payments of stated interest on the notes (other than any pre-issuance accrued interest excluded from the purchase price of the notes, as discussed above under “— Pre-issuance Accrued Interest”) will generally be taxable to a U.S. holder as ordinary interest income at the time such holder receives or accrues such amounts, in accordance with its regular method of accounting.

Amortizable Premium.  The notes are being issued at a “premium” equal to the difference between their initial purchase price (excluding any pre-issuance accrued interest excluded from the purchase price of the notes, as discussed above under “— Pre-issuance Accrued Interest”) and their stated principal amount. Accordingly, even though the notes are treated as having OID (as a result of being treated as issued in a qualified reopening, as discussed above under “— Qualified Reopening”), a U.S. holder will not be required to include any OID with respect to the notes in income. In addition, a U.S. holder generally may elect to amortize the premium over the remaining term of the notes on a constant yield method as an offset to interest when includible in income under the U.S. holder’s regular accounting method. A U.S. holder who elects to amortize any premium on notes must reduce its tax basis in the notes by the amount of the premium amortized in any year. An election to amortize premium applies to all taxable debt obligations held by the U.S. holder at the beginning of the first taxable year to which the election applies and to all such obligations thereafter acquired by the U.S. holder and may be revoked only with the consent of the IRS. Premium on notes held by a U.S. holder who does not make such an election will decrease the gain or increase the loss otherwise recognized on the disposition of the notes. U.S. holders should consult their tax advisors regarding these rules, including the period over which the premium may be amortized and the amount of premium (if any) allowed in a particular tax year.

Disposition.  Upon the sale, exchange, redemption or other taxable disposition of a note, a U.S. holder will generally recognize taxable capital gain or loss equal to the difference, if any, between the amount realized and the holder’s adjusted tax basis in the note at the time. A U.S. holder’s adjusted tax basis in a note will generally equal the amount paid by the holder for the note (excluding pre-issuance accrued interest excluded from the purchase price of such note, as discussed above under “— Pre-issuance Accrued Interest”), reduced by any amortized premium with respect to the note and decreased by principal payments received by the U.S. holder. Such gain or loss will be long-term capital gain or loss if the U.S. holder’s holding period with respect to the note disposed of is more than one year at the time. To the extent that amounts received include accrued but unpaid interest that the U.S. holder has not yet included in income, such interest will not

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be taken into account in determining gain or loss, but will instead be taxable as ordinary interest income. Long-term capital gains of non-corporate U.S. holders will generally be subject to United States federal income tax at a reduced rate. The deductibility of capital losses is subject to limitations.

Information Reporting and Backup Withholding

Information reporting requirements generally will apply to payments of interest on the notes and to the proceeds of a sale of a note paid to a U.S. holder unless the U.S. holder is an exempt recipient (such as a corporation). Backup withholding will apply to those payments if the U.S. holder fails to provide its correct taxpayer identification number, or certification of exempt status, generally by providing an IRS Form W-9 or an approved substitute or if the U.S. holder is notified by the IRS that the U.S. holder has failed to report in full payments of interest and dividend income. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against a U.S. holder’s U.S. federal income tax liability provided the required information is timely furnished to the IRS.

Non-U.S. Holders

Stated Interest.  A non-U.S. holder will generally not be subject to U.S. federal income tax on interest (which, for this purpose, does not include any pre-issuance accrued interest excluded from the purchase price of the notes, as discussed above under “— Pre-issuance Accrued Interest”) paid or accrued on a note if the interest is not effectively connected with a U.S. trade or business (or, in the case of certain tax treaties, is not attributable to a permanent establishment or fixed base within the U.S.). In addition, subject to the discussion of backup withholding below, a non-U.S. holder will generally not be subject to U.S. withholding tax on interest paid or accrued on a note, provided that the non-U.S. holder:

(1) does not actually or constructively, directly or indirectly, own 10% or more of our voting stock; and

(2) is not a controlled foreign corporation that is related to us (directly or indirectly) through stock ownership; and

(3) is not a bank that acquired the note in connection with an extension of credit made pursuant to a loan entered into in the ordinary course of business; and

(4) certifies to its non-U.S. status on IRS Form W-8BEN.

Alternatively, a non-U.S. holder that cannot satisfy the above requirements will generally be exempt from U.S. federal withholding tax with respect to interest paid or accrued on the notes if the holder establishes that such interest is not subject to withholding tax because it is effectively connected with the non-U.S. holder’s conduct of a trade or business in the U.S. or, in the case of certain tax treaties, is attributable to a permanent establishment or fixed base within the U.S. (generally, by providing an IRS Form W-8ECI). However, to the extent that such interest is effectively connected with the non-U.S. holder’s conduct of a trade or business in the U.S. (or, in the case of certain tax treaties, is attributable to a permanent establishment or fixed base within the U.S.), the non-U.S. holder will be subject to U.S. federal income tax on a net basis and, if it is a foreign corporation, may be subject to a 30% U.S. branch profits tax (or lower applicable treaty rate). If a non-U.S. holder does not satisfy the requirements described above, or does not establish that the interest is effectively connected with the non-U.S. holder’s conduct of a trade or business in the U.S., the non-U.S. holder will generally be subject to U.S. withholding tax, currently imposed at 30%. Under certain income tax treaties, the U.S. withholding rate on payments of interest may be reduced or eliminated, provided the non-U.S. holder complies with the applicable certification requirements (generally, by providing a properly completed IRS Form W-8BEN).

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Disposition.  Subject to the discussion below regarding information reporting and backup withholding, a non-U.S. holder will generally not be subject to U.S. federal income taxation with respect to gain realized on the sale, exchange, redemption or other disposition of a note, unless:

(1) the non-U.S. holder holds the note in connection with the conduct of a U.S. trade or business (or, in the case of certain tax treaties, the gain is attributable to a permanent establishment or fixed base within the U.S.); or

(2) in the case of an individual, such individual is present in the U.S. for 183 days or more during the taxable year in which gain is realized and certain other conditions are met.

A non-U.S. holder described in clause (1) above will be subject to tax on the net gain derived from the sale under regular graduated U.S. federal income tax rates and, if it is a foreign corporation, may be subject to a 30% U.S. branch profits tax (or lower applicable treaty rate). An individual described in clause (2) above will be subject to a flat 30% tax on the gain derived from the sale, which may be offset by U.S. source capital losses (even though the individual is not considered a resident of the U.S.) but may not be offset by any capital loss carryovers.

Information Reporting and Backup Withholding.  A non-U.S. holder may be subject to information reporting with respect to interest paid or accrued on a note and with respect to amounts realized on the disposition of a note. A non-U.S. holder not subject to U.S. income tax may nonetheless be subject to backup withholding (currently imposed at 28%) on interest paid or accrued on a note, and with respect to amounts realized on the disposition of a note, unless the non-U.S. holder provides the withholding agent with the applicable IRS Form W-8 or otherwise establishes an exemption. Non-U.S. holders should consult their tax advisors as to their qualifications for an exemption from backup withholding and the procedure for obtaining such an exemption. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules from a payment to a non-U.S. holder may be credited against the non-U.S. holder’s U.S. federal income tax liability, if any, or refunded, if the required information is furnished to the IRS in a timely manner. Non-U.S. holders are urged to consult their tax advisors regarding the applicability of the information reporting and backup withholding rules to them.

PLAN OF DISTRIBUTION

Each broker-dealer that receives exchange notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of exchange notes received in exchange for old notes where such old notes were acquired as a result of market-making activities or other trading activities. We have agreed that, starting on the expiration date of the exchange offer and ending on the close of business 180 days after the expiration date of the exchange offer, we will make this prospectus available to any broker-dealer for use in connection with any such resale.

We will not receive any proceeds from any sale of exchange notes by broker-dealers. Exchange notes received by broker-dealers for their own account pursuant to the exchange offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the exchange notes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer and/or the purchasers of any such exchange notes. Any broker-dealer that resells exchange notes that were received by it for its own account pursuant to the exchange offer and any broker or dealer that participates in a distribution of such exchange notes may be deemed to be an “underwriter” within the meaning of the Securities Act and any profit on any such resale of exchange notes and any commissions or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that by acknowledging that it will deliver and by delivering a

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prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.

For a period of 180 days after the expiration date of the exchange offer, the company will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests such documents in the letter of transmittal. We have agreed to pay all expenses incident to the exchange offer (including the expenses of one counsel for the holder of the old notes) other than commissions or concessions of any brokers or dealers and will indemnify the holders of the old notes (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act.

LEGAL MATTERS

The validity and enforceability of the exchange notes and the related guarantees will be passed upon for us by McDermott Will & Emery LLP.

EXPERTS

The consolidated financial statements of Merge Healthcare Incorporated as of December 31, 2010 and 2009 and for each of the three years in the period ended December 31, 2010 and management’s assessment of the effectiveness of internal control over financial reporting as of December 31, 2010, incorporated by reference in this Prospectus, have been so incorporated in reliance on the reports of BDO USA, LLP, an independent registered public accounting firm, incorporated herein by reference, given on the authority of said firm as experts in auditing and accounting.

The consolidated financial statements of Merge Healthcare Solutions Inc., formerly known as AMICAS, Inc. (Successor Company), as of December 31, 2010 and for the period April 28, 2010 through December 31, 2010 and AMICAS, Inc. (Predecessor Company) as of December 31, 2009 and for the period January 1, 2010 through April 27, 2010 and for each of the two years in the period ended December 31, 2009, included in this Prospectus and in the Registration Statement, have been so included in reliance on the reports of BDO USA, LLP, an independent registered public accounting firm, appearing elsewhere herein and in the Registration Statement, given on the authority of said firm as experts in auditing and accounting.

The consolidated financial statements of Emageon Inc. appearing in Emageon Inc.’s Annual Report (Form 10-K) for the year ended December 31, 2008 have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their report thereon, included therein, and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

The consolidated financial statements of Ophthalmic Imaging Systems appearing in Ophthalmic Imaging Systems’ Annual Report (Form 10-K as amended by Form 10-K/A) for the year ended December 31, 2010 have been audited by Perry-Smith LLP, independent registered public accounting firm, as set forth in their report thereon, included therein, and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

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WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a registration statement on Form S-4 under the Securities Act with respect to the securities we are offering by this prospectus. This prospectus does not contain all of the information included in the registration statement, including its exhibits and schedules. You should refer to the registration statement, including the exhibits and schedules, for further information about us and the securities we are offering. Statements we make in this prospectus about certain contracts or other documents are not necessarily complete. When we make such statements, we refer you to the copies of the contracts or documents that are filed as exhibits to the registration statement because those statements are qualified in all respects by reference to those exhibits.

We file reports, proxy and information statements, and other information with the SEC. You may read and copy this information at the Public Reference Room of the SEC located at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the Public Reference Room. Copies of all or any part of the registration statement may be obtained from the SEC’s offices upon payment of fees prescribed by the SEC. The SEC maintains an Internet site that contains periodic and current reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The address of the SEC’s website is www.sec.gov.

We make available free of charge on our Internet address www.merge.com our annual, quarterly and current reports, and amendments to these reports, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

INCORPORATION OF DOCUMENTS BY REFERENCE

The SEC requires us to “incorporate by reference” into this prospectus information that we file with the SEC in other documents. This means that we can disclose important information to you by referring you to other documents that contain that information. The information we incorporate by reference is considered to be part of this prospectus. Information contained in this prospectus and information that we file with the SEC in the future and that we incorporate by reference in this prospectus automatically updates and supersedes previously filed information. We incorporate by reference the documents listed below and any future filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this prospectus and prior to the sale of all the exchange notes covered by this prospectus.

•  Merge’s Annual Report on Form 10-K for the year ended December 31, 2010, filed with the SEC on March 16, 2011;

•  Merge’s Quarterly Reports on Form 10-Q for the periods ended March 31, 2011 and June 30, 2011, filed with the SEC on May 5, 2011 and August 9, 2011, respectively;

•  Merge’s Definitive Proxy Statement for its 2011 Annual Meeting of Stockholders, filed with the SEC on April 21, 2011 and supplemented on April 26, 2011;

•  Merge’s Current Reports on Form 8-K filed with the SEC on January 6, 2011, June 6, 2011, June 8, 2011 (Items 5.03, 8.01 and 9.01), June 8, 2011 (Items 5.02 and 5.07), June 15, 2011, June 20, 2011, August 8, 2011 and August 11, 2011 (as amended on August 22, 2011);

•  The (i) consolidated financial statements of Emageon Inc. as of December 31, 2008 and 2007 and for each of the three years in the period ended December 31, 2008 as set forth on pages F-2 and F-4 through F-30 of Emageon Inc.’s Annual Report on Form 10-K for the year ended December 31, 2008 filed with the SEC on March 26, 2009 and (ii) unaudited pro forma condensed consolidated financial statements (Exhibit 99.2) included in AMICAS, Inc.’s Current Report on Form 8-K filed with the SEC on April 3, 2009 (as amended by AMICAS, Inc.’s Current Report on Form 8-K/A filed with the SEC on June 16, 2009);

•  OIS’ Annual Report on Form 10-K for the year ended December 31, 2010, filed with the SEC on April 15, 2011 and amended on July 1, 2011;

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•  OIS’ Current Report on Form 10-Q for the quarterly period ended March 31, 2011, filed with the SEC on May 13, 2011; and

•  Any future filings we may make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of filing of the initial registration statement relating to this exchange offer and prior to the termination of any offering of securities offered by this prospectus.

A statement contained in a document incorporated by reference into this prospectus shall be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus, any prospectus supplement or in any other subsequently filed document which is also incorporated in this prospectus modifies or replaces such statement. Any statements so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus.

You can obtain a copy of any of our filings, at no cost, by writing to or telephoning us at the following address:

Merge Healthcare Incorporated
900 Walnut Ridge Drive
Hartland, Wisconsin 53029
Attention: Investor Relations
Phone: (262) 367-0700

To ensure timely delivery, please make your request as soon as practicable and, in any event, no later than five business days prior to the expiration of the exchange offer.

You should rely only upon the information provided in this prospectus or incorporated by reference into this prospectus. Merge has not authorized anyone to provide you with different information. You should not assume that the information in this prospectus, including any information incorporated by reference, is accurate as of any date other than the date of this prospectus.

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Merge Healthcare Incorporated

Offer To Exchange

$52,000,000 aggregate principal amount of its 11.75% Senior Secured Notes due 2015,

which have been registered under the Securities Act,

for any and all of its

outstanding 11.75% Senior Secured Notes due 2015

Guaranteed by

Abraxas Medical Solutions, Inc.
AMICAS Inc. (now Merge Healthcare Solutions Inc.),

Confirma Europe LLC,

Merge Asset Management Corp.,

Merge eClinical Inc.,

Ophthalmic Imaging Systems,

Requisite Software Inc., and

Stryker Imaging Corporation

PROSPECTUS

          , 2011

The Exchange Agent for the Exchange Offer is:

THE BANK OF NEW YORK MELLON

Corporate Trust Operations

Reorganization Unit

101 Barclay Street — 7 East

New York, New York 10286

Attn: [          ]

Facsimile: (212) 298-1915

PART II INFORMATION NOT REQUIRED IN THE PROSPECTUS

Item 20.   Indemnification of Directors and Officers

(a) Merge Healthcare Incorporated

Merge Healthcare is a Delaware corporation. Reference is made to Section 102(b)(7) of the General Corporation Law of the State of Delaware (the “DGCL”), which enables a corporation in its original certificate of incorporation or an amendment to eliminate or limit the personal liability of a director for violations of the director’s fiduciary duty, except:

•  for any breach of the director’s duty of loyalty to the corporation or its stockholders;

•  for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;

•  pursuant to Section 174 of the DGCL (providing for liability of directors for unlawful payment of dividends or unlawful stock purchases or redemptions); or

•  for any transaction from which a director derived an improper personal benefit.

Reference is also made to Section 145 of the DGCL, which provides that a corporation may indemnify any persons, including officers and directors, who are, or are threatened to be made, parties to any threatened, pending or completed legal action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of such corporation), by reason of the fact that such person is or was a director, officer, employee or agent of such corporation or is or was serving at the request of such corporation as a director, officer, employee or agent of another corporation or enterprise. The indemnity may include expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, provided such director, officer, employee or agent acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe that the person’s conduct was unlawful. A Delaware corporation may indemnify officers and directors in an action by or in the right of the corporation under the same conditions, except that no indemnification is permitted without judicial approval if the officer or director is adjudged to be liable to the corporation. Where an officer or director is successful on the merits or otherwise in the defense of any action referred to above, the corporation must indemnify him against the expenses that such officer or director actually and reasonably incurred. The indemnification permitted under the DGCL is not exclusive, and a corporation is empowered to purchase and maintain insurance against liabilities, whether or not indemnification would be permitted by statute.

Article XI of Merge’s Bylaws provides in effect that, subject to certain limited exceptions, Merge Healthcare shall indemnify its directors and officers to the extent not prohibited by the DGCL. Merge’s directors and officers are insured under policies of insurance maintained by Merge Healthcare, subject to the limits of the policies, against certain losses arising from any claims made against them by reason of being or having been such directors or officers. In addition, Merge Healthcare has entered into contracts with certain of its directors providing for indemnification of such persons by Merge Healthcare to the full extent authorized or permitted by law, subject to certain limited exceptions.

(b) Abraxas Medical Solutions, Inc., AMICAS, Inc. (now Merge Healthcare Solutions Inc.), Confirma Europe LLC, Merge Asset Management Corp., Merge eClinical Inc., Ophthalmic Imaging Systems, Requisite Software Inc. and Stryker Imaging Corporation.

See the discussion of Delaware General Corporation Law above. In addition, as noted above, each of Abraxas Medical Solutions, Inc., AMICAS, Inc. (now Merge Healthcare Solutions, Inc.), Confirma Europe LLC, Merge Asset Management Corp., Merge eClinical Inc., Ophthalmic Imaging Systems, Requisite Software Inc. and Stryker Imaging Corporation enter into indemnification agreements with their directors and executive officers that cover their service as an officer and director of such entities.

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Item 21.   Exhibits and Financial Statement Schedules.

(a) Exhibits

See the Exhibit Index, which follows the signature pages and which is incorporated herein by reference.

(b) Financial Statement Schedules.

None.

Item 22.   Undertakings.

The undersigned Registrants hereby undertake:

(a) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

(b) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(c) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(d) That, for the purpose of determining liability of the registrants under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

(e) That, for the purpose of determining liability of the registrants under the Securities Act of 1933 to any purchaser in the initial distribution of the securities:

The undersigned registrants undertake that in a primary offering of securities of the undersigned registrants pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the

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following communications, the undersigned registrants will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i) Any preliminary prospectus or prospectus of the undersigned registrants relating to the offering required to be filed pursuant to Rule 424;

(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrants or used or referred to by the undersigned registrants;

(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrants or their securities provided by or on behalf of the undersigned registrants; and

(iv) Any other communication that is an offer in the offering made by the undersigned registrants to the purchaser.

(f) That, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrants pursuant to the foregoing provisions, or otherwise, the registrants have been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrants of expenses incurred or paid by a director, officer or controlling person of the registrants in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrants will, unless in the opinion of their counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.

(g) The undersigned registrants hereby undertake to respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.

(h) The undersigned registrants hereby undertake to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Hartland, Wisconsin on this 1^st day of September, 2011.

Merge Healthcare Incorporated

By:  /s/  Jeffery A. Surges

Name:     Jeffery A. Surges

Title:  Chief Executive Officer

POWER OF ATTORNEY

We, the undersigned officers and directors of Merge Healthcare Incorporated, hereby severally constitute and appoint Jeffery A. Surges, Ann G. Mayberry-French and Steven M. Oreskovich, and each of them singly, our true and lawful attorneys with full power to any of them, and to each of them singly, to sign for us and in our names in the capacities indicated below the registration statement on Form S-4 filed herewith and any and all pre-effective and post-effective amendments to said registration statement and generally to do all such things in our name and behalf in our capacities as officers and directors to enable Merge Healthcare Incorporated to comply with the provisions of the Securities Act of 1933, as amended, and all requirements of the Securities and Exchange Commission, hereby ratifying and confirming our signatures as they may be signed by our said attorneys, or any of them, to said registration statement and any and all amendments thereto.

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities indicated on this 1^st day of September, 2011.

Signature	Title
/s/  Michael W. Ferro, Jr. Michael W. Ferro, Jr.	Chairman of the Board
/s/  Jeffery A. Surges Jeffery A. Surges	Director and Chief Executive Officer (Principal Executive Officer)
/s/  Justin C. Dearborn Justin C. Dearborn	Director, President and Chief Financial Officer (Principal Financial Officer)
/s/  Steven M. Oreskovich Steven M. Oreskovich	Chief Accounting Officer (Principal Accounting Officer)
/s/  Dennis Brown Dennis Brown	Director
/s/  Gregg G. Hartemayer Gregg G. Hartemayer	Director
/s/  Richard A. Reck Richard A. Reck	Director
/s/  Neele E. Stearns, Jr. Neele E. Stearns, Jr.	Director

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Hartland, Wisconsin on this 1^st day of September, 2011.

Abraxas Medical Solutions, Inc.

By:  /s/  Justin C. Dearborn

Name:     Justin C. Dearborn

Title:  President and Chief Executive Officer

POWER OF ATTORNEY

We, the undersigned officers and directors of Abraxas Medical Solutions, Inc., hereby severally constitute and appoint Jeffery A. Surges, Ann G. Mayberry-French and Steven M. Oreskovich, and each of them singly, our true and lawful attorneys with full power to any of them, and to each of them singly, to sign for us and in our names in the capacities indicated below the registration statement on Form S-4 filed herewith and any and all pre-effective and post-effective amendments to said registration statement and generally to do all such things in our name and behalf in our capacities as officers and directors to enable Merge Healthcare Incorporated to comply with the provisions of the Securities Act of 1933, as amended, and all requirements of the Securities and Exchange Commission, hereby ratifying and confirming our signatures as they may be signed by our said attorneys, or any of them, to said registration statement and any and all amendments thereto.

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities indicated on this 1^st day of September, 2011.

Signature	Title
/s/  Justin C. Dearborn Justin C. Dearborn	Director, President and Chief Executive Officer (Principal Executive Officer)
/s/  Steven M. Oreskovich Steven M. Oreskovich	Director, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)
/s/  Ann G. Mayberry-French Ann G. Mayberry-French	Director

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Hartland, Wisconsin on this 1^st day of September, 2011.

AMICAS, Inc. (now Merge Healthcare Solutions Inc.)

By:  /s/  Justin C. Dearborn

Name:     Justin C. Dearborn

Title:  President and Chief Executive Officer

POWER OF ATTORNEY

We, the undersigned officers and directors of AMICAS, Inc., (now Merge Healthcare Solutions Inc.), hereby severally constitute and appoint Jeffery A. Surges, Ann G. Mayberry-French and Steven M. Oreskovich, and each of them singly, our true and lawful attorneys with full power to any of them, and to each of them singly, to sign for us and in our names in the capacities indicated below the registration statement on Form S-4 filed herewith and any and all pre-effective and post-effective amendments to said registration statement and generally to do all such things in our name and behalf in our capacities as officers and directors to enable Merge Healthcare Incorporated to comply with the provisions of the Securities Act of 1933, as amended, and all requirements of the Securities and Exchange Commission, hereby ratifying and confirming our signatures as they may be signed by our said attorneys, or any of them, to said registration statement and any and all amendments thereto.

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities indicated on this 1^st day of September, 2011.

Signature	Title
/s/  Justin C. Dearborn Justin C. Dearborn	Director, President and Chief Executive Officer (Principal Executive Officer)
/s/  Steven M. Oreskovich Steven M. Oreskovich	Director, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)
/s/  Ann G. Mayberry-French Ann G. Mayberry-French	Director

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Hartland, Wisconsin on this 1^st day of September, 2011.

Confirma Europe LLC

By:  /s/  Justin C. Dearborn

Name:     Justin C. Dearborn

Title:  President and Chief Executive Officer of the Sole Manager and Chief Executive Officer of the Registrant

POWER OF ATTORNEY

We, the undersigned officers and directors of Confirma Europe LLC, hereby severally constitute and appoint Jeffery A. Surges, Ann G. Mayberry-French and Steven M. Oreskovich, and each of them singly, our true and lawful attorneys with full power to any of them, and to each of them singly, to sign for us and in our names in the capacities indicated below the registration statement on Form S-4 filed herewith and any and all pre-effective and post-effective amendments to said registration statement and generally to do all such things in our name and behalf in our capacities as officers and directors to enable Merge Healthcare Incorporated to comply with the provisions of the Securities Act of 1933, as amended, and all requirements of the Securities and Exchange Commission, hereby ratifying and confirming our signatures as they may be signed by our said attorneys, or any of them, to said registration statement and any and all amendments thereto.

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities indicated on this 1^st day of September, 2011.

Signature	Title
/s/  Justin C. Dearborn Justin C. Dearborn	President and Chief Executive Officer of the Sole Manager and Chief Executive Officer of the Registrant (Principal Executive Officer)
/s/  Steven M. Oreskovich Steven M. Oreskovich	Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Hartland, Wisconsin on this 1^st day of September, 2011.

Merge Asset Management Corp.

By:  /s/  Justin C. Dearborn

Name:     Justin C. Dearborn

Title:  President and Chief Executive Officer

POWER OF ATTORNEY

We, the undersigned officers and directors of Merge Asset Management Corp. hereby severally constitute and appoint Jeffery A. Surges, Ann G. Mayberry-French and Steven M. Oreskovich, and each of them singly, our true and lawful attorneys with full power to any of them, and to each of them singly, to sign for us and in our names in the capacities indicated below the registration statement on Form S-4 filed herewith and any and all pre-effective and post-effective amendments to said registration statement and generally to do all such things in our name and behalf in our capacities as officers and directors to enable Merge Healthcare Incorporated to comply with the provisions of the Securities Act of 1933, as amended, and all requirements of the Securities and Exchange Commission, hereby ratifying and confirming our signatures as they may be signed by our said attorneys, or any of them, to said registration statement and any and all amendments thereto.

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities indicated on this 1^st day of September, 2011.

Signature	Title
/s/  Justin C. Dearborn Justin C. Dearborn	Director, President and Chief Executive Officer (Principal Executive Officer)
/s/  Steven M. Oreskovich Steven M. Oreskovich	Director, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)
/s/  Ann G. Mayberry-French Ann G. Mayberry-French	Director

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Hartland, Wisconsin on this 1^st day of September, 2011.

Merge eClinical Inc.

By:  /s/  Justin C. Dearborn

Name:     Justin C. Dearborn

Title:  President and Chief Executive Officer

POWER OF ATTORNEY

We, the undersigned officers and directors of Merge eClinical Inc., hereby severally constitute and appoint Jeffery A. Surges, Ann G. Mayberry-French and Steven M. Oreskovich, and each of them singly, our true and lawful attorneys with full power to any of them, and to each of them singly, to sign for us and in our names in the capacities indicated below the registration statement on Form S-4 filed herewith and any and all pre-effective and post-effective amendments to said registration statement and generally to do all such things in our name and behalf in our capacities as officers and directors to enable Merge Healthcare Incorporated to comply with the provisions of the Securities Act of 1933, as amended, and all requirements of the Securities and Exchange Commission, hereby ratifying and confirming our signatures as they may be signed by our said attorneys, or any of them, to said registration statement and any and all amendments thereto.

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities indicated on this 1^st day of September, 2011.

Signature	Title
/s/  Justin C. Dearborn Justin C. Dearborn	Director, President and Chief Executive Officer (Principal Executive Officer)
/s/  Steven M. Oreskovich Steven M. Oreskovich	Director, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)
/s/  Ann G. Mayberry-French Ann G. Mayberry-French	Director

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Hartland, Wisconsin on this 1^st day of September, 2011.

Ophthalmic Imaging Systems

By: /s/ Justin C. Dearborn

Name:     Justin C. Dearborn

Title:  President and Chief Executive Officer

POWER OF ATTORNEY

We, the undersigned officers and directors of Ophthalmic Imaging Systems, hereby severally constitute and appoint Jeffery A. Surges, Ann G. Mayberry-French and Steven M. Oreskovich, and each of them singly, our true and lawful attorneys with full power to any of them, and to each of them singly, to sign for us and in our names in the capacities indicated below the registration statement on Form S-4 filed herewith and any and all pre-effective and post-effective amendments to said registration statement and generally to do all such things in our name and behalf in our capacities as officers and directors to enable Merge Healthcare Incorporated to comply with the provisions of the Securities Act of 1933, as amended, and all requirements of the Securities and Exchange Commission, hereby ratifying and confirming our signatures as they may be signed by our said attorneys, or any of them, to said registration statement and any and all amendments thereto.

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities indicated on this 1^st day of September, 2011.

Signature	Title
/s/  Justin C. Dearborn Justin C. Dearborn	Director, President and Chief Executive Officer (Principal Executive Officer)
/s/  Steven M. Oreskovich Steven M. Oreskovich	Director, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)
/s/  Ann G. Mayberry-French Ann G. Mayberry-French	Director

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Hartland, Wisconsin on this 1^st day of September, 2011.

Requisite Software Inc.

By:  /s/  Justin C. Dearborn

Name:     Justin C. Dearborn

Title:  President and Chief Executive Officer

POWER OF ATTORNEY

We, the undersigned officers and directors of Requisite Software Inc., hereby severally constitute and appoint Jeffery A. Surges, Ann G. Mayberry-French and Steven M. Oreskovich, and each of them singly, our true and lawful attorneys with full power to any of them, and to each of them singly, to sign for us and in our names in the capacities indicated below the registration statement on Form S-4 filed herewith and any and all pre-effective and post-effective amendments to said registration statement and generally to do all such things in our name and behalf in our capacities as officers and directors to enable Merge Healthcare Incorporated to comply with the provisions of the Securities Act of 1933, as amended, and all requirements of the Securities and Exchange Commission, hereby ratifying and confirming our signatures as they may be signed by our said attorneys, or any of them, to said registration statement and any and all amendments thereto.

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities indicated on this 1^st day of September, 2011.

Signature	Title
/s/  Justin C. Dearborn Justin C. Dearborn	Director, President and Chief Executive Officer (Principal Executive Officer)
/s/  Steven M. Oreskovich Steven M. Oreskovich	Director, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)
/s/  Ann G. Mayberry-French Ann G. Mayberry-French	Director

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Hartland, Wisconsin on this 1^st day of September, 2011.

Stryker Imaging Corporation

By: /s/ Justin C. Dearborn

Name:     Justin C. Dearborn

Title:  President

POWER OF ATTORNEY

We, the undersigned officers and directors of Stryker Imaging Corporation, hereby severally constitute and appoint Jeffery A. Surges, Ann G. Mayberry-French and Steven M. Oreskovich, and each of them singly, our true and lawful attorneys with full power to any of them, and to each of them singly, to sign for us and in our names in the capacities indicated below the registration statement on Form S-4 filed herewith and any and all pre-effective and post-effective amendments to said registration statement and generally to do all such things in our name and behalf in our capacities as officers and directors to enable Merge Healthcare Incorporated to comply with the provisions of the Securities Act of 1933, as amended, and all requirements of the Securities and Exchange Commission, hereby ratifying and confirming our signatures as they may be signed by our said attorneys, or any of them, to said registration statement and any and all amendments thereto.

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities indicated on this 1^st day of September, 2011.

Signature	Title
/s/  Justin C. Dearborn Justin C. Dearborn	Director and President (Principal Executive Officer)
/s/  Steven M. Oreskovich Steven M. Oreskovich	Director and Treasurer (Principal Financial and Accounting Officer)
/s/  Ann G. Mayberry-French Ann G. Mayberry-French	Director

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EXHIBIT INDEX

2	.1	Agreement and Plan of Merger, dated as of May 30, 2009, by and among Registrant, Merge Acquisition Corp., a wholly owned subsidiary of Registrant, and etrials Worldwide, Inc.(A)
2	.2	Agreement and Plan of Merger, dated as of August 7, 2009, by and among Registrant, Merge Acquisition Corporation, a wholly owned subsidiary of Registrant, Confirma, Inc. and John L. Brooks(B)
2	.3	Agreement and Plan of Merger dated as of February 28, 2010 by and among Registrant, Project Ready Corp. and AMICAS, Inc.(C)
2	.4	Stock Purchase Agreement, dated as of July 2, 2010, by and among Stryker Corporation, Stryker Imaging Corporation and the Registrant(D)
2	.5	Asset Purchase Agreement, dated as of July 30, 2010, between Registrant and Merrick Healthcare Solutions, LLC d/b/a Olivia Greets(E)
2	.6	Agreement and Plan of Merger, dated as of June 5, 2011 by and among the Registrant, ES Acquisition Corp., a wholly owned subsidiary of Registrant and Ophthalmic Imaging Systems(F)
3	.1	Certificate of Incorporation as filed on October 14, 2008, and Certificate of Merger as filed on December 3, 2008 and effective on December 5, 2008(G)
3	.2	Series A Preferred Stock Certificate of Designations(H)
3	.3	Amendment to the Certificate of Incorporation as filed on September 27, 2010(I)
3	.4	Bylaws of Registrant(G)
4	.1	Indenture, dated as of April 28, 2010, by and among Registrant, the guarantors of the Notes and The Bank of New York Mellon Trust Company, N.A., as Trustee, governing the 11.75% Senior Secured Notes due 2015(H)
4	.2	First Supplemental Indenture dated as of June 14, 2011(J)
4	.3	Second Supplemental Indenture dated as of June 20, 2011(K)
4	.4	Third Supplemental Indenture dated as of September 1, 2011*
4	.5	Registration Rights Agreement dated as of June 20, 2011 by and among the Company, the guarantors of the Notes and Morgan Stanley & Co. LLC(K)
5	.1	Opinion of McDermott Will & Emery LLP*
10	.1	Registration Rights Agreement, dated June 4, 2008, by and between Registrant and Merrick RIS, LLC(L)
10	.2	Securities Purchase Agreement, dated May 21, 2008, by and among Registrant, the subsidiaries listed on the Schedule of Subsidiaries attached thereto, and Merrick RIS, LLC(M)
10	.3	Employment Letter Agreement between the Registrant and Justin C. Dearborn entered into as of June 4, 2008(N)
10	.4	Employment Letter Agreement between the Registrant and Steven M. Oreskovich entered into as of June 4, 2008(N)
10	.5	Amendment dated July 1, 2008 to that certain Securities Purchase Agreement, dated May 21, 2008, by and among the Registrant, certain of its subsidiaries and Merrick RIS, LLC(O)
10	.6	Consulting Agreement, effective as of January 1, 2009, by and between Registrant and Merrick RIS, LLC(G)
10	.7	Amendment effective as of January 1, 2010 to that certain Consulting Agreement, effective as of January 1, 2009, by and among the Registrant and Merrick RIS, LLC(N)
10	.8	1996 Stock Option Plan for Employees of Registrant dated May 13, 1996(Q), as amended and restated in its entirety as of September 1, 2003(R)
10	.9	1998 Stock Option Plan for Directors(S)
10	.10	2000 Employee Stock Purchase Plan of Registrant effective July 1, 2000(T)
10	.11	2005 Equity Incentive Plan adopted March 4, 2005, and effective May 24, 2005 as amended(U)
10	.12	Employment Agreement by and between the Registrant and Jeffery A. Surges entered into as of November 5, 2010(D)
12	.1	Computation of Ratio of Earnings to Fixed Charges*
14	.1	Code of Ethics(G)
14	.2	Whistleblower Policy(G)

23	.1	Consent of BDO USA, LLP, Independent Registered Public Accounting Firm, with respect to the financial statements of the Registrant*
23	.2	Consent of BDO USA, LLP, Independent Registered Public Accounting Firm, with respect to the financial statements of AMICAS, Inc. (now Merge Healthcare Solutions Inc.)*
23	.3	Consent of Ernst & Young LLP — Boca Raton, Florida, Independent Registered Public Accounting Firm, with respect to the financial statements of Emageon Inc.*
23	.4	Consent of Perry-Smith LLP, Independent Registered Public Accounting Firm, with respect to the financial statements of Ophthalmic Imaging Systems*
23	.5	Consent of McDermott Will & Emery LLP (included in the opinion filed as Exhibit 5.1)
24	.1	Powers of Attorney (included in the signature pages hereto)
25	.1	Form T-1, Trustee’s Statement of Eligibility*
99	.1	Letter of Transmittal*
99	.2	Notice of Guaranteed Delivery*
99	.3	Letter to Registered Holders*
99	.4	Letter To Clients and Instructions To Registered Holder from Beneficial Owner*
99	.5	Merge Healthcare Incorporated and AMICAS, Inc. (now Merge Healthcare Solutions Inc.) Unaudited Pro Forma Condensed Consolidated Financial Information for the Year Ended December 31, 201*
99	.6	Ophthalmic Imaging Systems Condensed Consolidated Financial Statements and Notes for the Three and Six Months Ended June 30, 2011 and 2010*
99	.7	Merge Healthcare Solutions Inc. Consolidated Financial Statements and Notes as of December 31, 2010 and 2009, and for the Periods Ended December 31, 2010 and April 27, 2010, and the Years Ended December 31, 2009 and 2008*
99	.8	Merge Healthcare Solutions Inc. Condensed Consolidated Financial Statements and Notes for the Six Months Ended June 30, 2011 and 2010*

* Filed herewith

(A)	Incorporated by reference from the Registrant’s Current Report on Form 8-K dated June 2, 2009.
(B)	Incorporated by reference from the Registrant’s Current Report on Form 8-K dated August 10, 2009.
(C)	Incorporated by reference from the Registrant’s Current Report on Form 8-K dated March 4, 2010.
(D)	Incorporated by reference from the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010.
(E)	Incorporated by reference from the Registrant’s Current Report of Form 8-K dated July 30, 2010.
(F)	Incorporated by reference from the Registrant’s Current Report on Form 8-K dated June 6, 2011.
(G)	Incorporated by reference from the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008.
(H)	Incorporated by reference from the Registrant’s Current Report on Form 8-K dated March 30, 2010.
(I)	Incorporated by reference from the Registrant’s Current Report on Form 8-K dated September 30, 2010.
(J)	Incorporated by reference from the Registrant’s Current Report on Form 8-K dated June 15, 2011.
(K)	Incorporated by reference from the Registrant’s Current Report on Form 8-K dated June 20, 2011.
(L)	Incorporated by reference from the Registrant’s Current Report on Form 8-K dated June 6, 2008.
(M)	Incorporated by reference from the Registrant’s Current Report on Form 8-K dated May 22, 2008.
(N)	Incorporated by reference from the Registrant’s Current Report on Form 8-K dated July 15, 2008.
(O)	Incorporated by reference from the Registrant’s Current Report on Form 8-K dated July 7, 2008.
(P)	Incorporated by reference from the Registrant’s Current Report on Form 8-K dated April 2, 2010.
(Q)	Incorporated by reference from Registration Statement on Form SB-2 (No. 333-39111) effective January 29, 1998.
(R)	Incorporated by reference from the Registrant’s Quarterly Report on Form 10-Q for the period ended September 30, 2003.

(S)	Incorporated by reference from the Registrant’s Annual Report on Form 10-KSB for the fiscal year ended December 31, 1997.
(T)	Incorporated by reference from the Registrant’s Proxy Statement for the Annual Meeting of Shareholders on May 23, 2000.
(U)	Incorporated by reference from the Registrant’s Proxy Statement for the Annual Meeting of Shareholders on June 2, 2011.

EX-4.4

Exhibit 4.4

SUPPLEMENTAL INDENTURE

          Supplemental Indenture (this “Supplemental Indenture”), dated as of September 1, 2011 among Ophthalmic Imaging Systems, a California corporation (“OIS”), Abraxas Medical Solutions, Inc. (“Abraxas”; together with OIS, each a “Guaranteeing Subsidiary”), each a subsidiary of Merge Healthcare Incorporated, a Delaware corporation (the “Issuer”), and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”) and Collateral Agent.

W I T N E S S E T H

          WHEREAS, the Issuer and each of the Guarantors (as defined in the Indenture referred to below) have heretofore executed and delivered to the Trustee an indenture, dated as of April 28, 2010, as amended by that certain First Supplemental Indenture dated as of June 14, 2011, and by that certain Second Supplemental Indenture dated as of June 20, 2011, (together, as amended, supplemented or otherwise modified from time to time, the “Indenture”), providing for the issuance of 11.75% Senior Secured Notes due 2015 (the “Notes”);

          WHEREAS, the Indenture provides that under certain circumstances each Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which each Guaranteeing Subsidiary shall unconditionally guarantee all of the Issuer’s Obligations under the Notes and the Indenture on the terms and conditions set forth herein and under the Indenture (the “Guarantee”); and

          WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture.

          NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:

          (1) Capitalized Terms. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

          (2) Agreement to Guarantee. Each Guaranteeing Subsidiary hereby agrees as follows:

(a) Along with all Guarantors named in the Indenture, to jointly and severally unconditionally guarantee to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of the Indenture, the Notes or the obligations of the Issuer hereunder or thereunder, that:

     (i) the principal of and interest, premium and Additional Interest, if any, on the Notes will be promptly paid in full when due, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other obligations of the Issuer to the Holders or the Trustee hereunder or thereunder will be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and

     (ii) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same will be promptly paid in full when due or

performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Guarantors and each Guaranteeing Subsidiary shall be jointly and severally obligated to pay the same immediately. This is a guarantee of payment and not a guarantee of collection.

(b) The obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or the Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Issuer, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor.

(c) The following is hereby waived: diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest, notice and all demands whatsoever.

(d) This Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes, the Indenture and this Supplemental Indenture, and each Guaranteeing Subsidiary accepts all obligations of a Guarantor under the Indenture.

(e) If any Holder or the Trustee is required by any court or otherwise to return to the Issuer, the Guarantors (including each Guaranteeing Subsidiary), or any custodian, trustee, liquidator or other similar official acting in relation to either the Issuer or the Guarantors, any amount paid either to the Trustee or such Holder, this Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect.

(f) Each Guaranteeing Subsidiary shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby.

(g) As between each Guaranteeing Subsidiary, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article VI of the Indenture for the purposes of this Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article VI of the Indenture, such obligations (whether or not due and payable) shall forthwith become due and payable by each Guaranteeing Subsidiary for the purpose of this Guarantee.

(h) Each Guaranteeing Subsidiary shall have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the Holders under this Guarantee.

(i) In case any provision of this Guarantee shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

(j) This Guarantee shall be a general unsecured senior obligation of such Guaranteeing Subsidiary, ranking pari passu with any other future Senior Indebtedness of such Guaranteeing Subsidiary, if any.

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(k) Each payment to be made by each Guaranteeing Subsidiary in respect of this Guarantee shall be made without set-off, counterclaim, reduction or diminution of any kind or nature.

(l) This Guarantee shall be governed by the terms and provisions set forth in Section 2 of the Guarantee and Collateral Agreement.

          (3) Execution and Delivery. Each Guaranteeing Subsidiary agrees that the Guarantee shall remain in full force and effect notwithstanding the absence of the endorsement of any notation of such Guarantee on the Notes.

          (4) Merger, Consolidation or Sale of All or Substantially All Assets.

          (a) Except as otherwise provided in Section 5.01(c) of the Indenture, each Guaranteeing Subsidiary may not consolidate or merge with or into or wind up into (whether or not the Issuer or such Guaranteeing Subsidiary is the surviving corporation), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets, in one or more related transactions, to any Person unless:

(i) (A) such Guaranteeing Subsidiary is the surviving corporation or the Person formed by or surviving any such consolidation or merger (if other than such Guaranteeing Subsidiary) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a corporation organized or existing under the laws of the jurisdiction of organization of such Guaranteeing Subsidiary, as the case may be, or the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (such Guaranteeing Subsidiary or such Person, as the case may be, being herein called the “Successor Person”);

(B) the Successor Person, if other than such Guaranteeing Subsidiary, expressly assumes all the obligations of such Guaranteeing Subsidiary under the Indenture, the Security Documents and such Guaranteeing Subsidiary’s related Guarantee pursuant to supplemental indentures or other documents or instruments in form reasonably satisfactory to the Trustee;

(C) immediately after such transaction, no Default exists; and

(D) the Issuer shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indentures, if any, comply with the Indenture;

(E) any Collateral owned by or transferred to the Successor Person shall (i) continue to constitute Collateral under the Indenture and the Security Documents, (ii) be subject to the Lien in favor of the Collateral Agent for the benefit of the Trustee and the Holders of the Notes, and (iii) not be subject to any Lien other than Permitted Liens and other Liens permitted under Section 4.12 of the Indenture; and

(F) to the extent any assets of the Person which is merged or consolidated with or into the Successor Company are assets of the type which would constitute Collateral under the Securities Documents, the Successor Company will take such action as may be reasonably necessary to cause such property and assets to be made subject to the Lien of the Security Documents in the manner and to the extent required in the Indenture or any of the Security Documents and shall take all reasonably necessary action so that such Lien is perfected to the extent required by the Security Documents; or

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(ii) the transaction is made in compliance with Section 4.10 of the Indenture;

          (b) Subject to certain limitations described in the Indenture, the Successor Person will succeed to, and be substituted for, such Guaranteeing Subsidiary under the Indenture and such Guaranteeing Subsidiary’s Guarantee. Notwithstanding the foregoing, each Guaranteeing Subsidiary may merge into or transfer all or part of its properties and assets to another Guarantor or the Issuer.

          (5) Releases.

          The Guarantee of each Guaranteeing Subsidiary shall be automatically and unconditionally released and discharged, and no further action by such Guaranteeing Subsidiary, the Issuer or the Trustee is required for the release of such Guaranteeing Subsidiary’s Guarantee, upon:

(1) (A) in connection with any sale or other disposition of all or substantially all of the assets of such Guaranteeing Subsidiary (including by way of merger or consolidation) to a Person that is not (either before or after giving effect to such transaction) such Guaranteeing Subsidiary, if the sale or other disposition does not violate Section 4.10;

(B) in connection with any sale or other disposition of the capital stock of such Guaranteeing Subsidiary (including by way of merger or consolidation) to a Person that is not (either before or after giving effect to such transaction) the Company or a Restricted Subsidiary of the Company, such that, immediately after giving effect to such transaction, such Guaranteeing Subsidiary would no longer constitute a Subsidiary of the Company, if the sale or other disposition does not violate Section 4.10;

(C) the proper designation of such Guaranteeing Subsidiary as an Unrestricted Subsidiary;

(D) the Issuer exercising its Legal Defeasance option or Covenant Defeasance option in accordance with Article VIII of the Indenture or the Issuer’s obligations under the Indenture being discharged in accordance with the terms of the Indenture; and

(2) such Guaranteeing Subsidiary delivering to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for in the Indenture relating to such transaction have been complied with. Upon delivery of such Officer’s Certificate and Opinion of Counsel, the Trustee shall execute any documents reasonably required in order to acknowledge the release of such Guarantor from its obligations under its Guarantee.

          (6) No Recourse Against Others. No director, officer, employee, incorporator or stockholder of each Guaranteeing Subsidiary shall have any liability for any obligations of the Issuer or the Guarantors (including each Guaranteeing Subsidiary) under the Notes, any Guarantees, the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting Notes waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

          (7) Governing Law. THIS SUPPLEMENTAL INDENTURE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

          (8) Counterparts. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

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          (9) Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof.

          (10) The Trustee. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by each Guaranteeing Subsidiary.

          (12) Benefits Acknowledged. Each Guaranteeing Subsidiary’s Guarantee is subject to the terms and conditions set forth in the Indenture. Each Guaranteeing Subsidiary acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by the Indenture and this Supplemental Indenture and that the guarantee and waivers made by it pursuant to this Guarantee are knowingly made in contemplation of such benefits.

          (13) Successors. All agreements of each Guaranteeing Subsidiary in this Supplemental Indenture shall bind its Successors, except as otherwise provided in Section 2(k) hereof or elsewhere in this Supplemental Indenture. All agreements of the Trustee in this Supplemental Indenture shall bind its successors.

[Remainder of Page Intentionally Left Blank]

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          IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, all as of the date first above written.

OPHTHALMIC IMAGING SYSTEMS
By:	/s/ Ann G. Mayberry-French
	Name:	Ann G. Mayberry-French
	Title:	Corporate Secretary
ABRAXAS MEDICAL SOLUTIONS, INC.
By:	/s/ Ann G. Mayberry-French
	Name:	Ann G. Mayberry-French
	Title:	Corporate Secretary
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
By:	/s/ Benita A. Vaughn
	Name:	Benita A. Vaughn
	Title:	Vice President

[Signature Page to Supplemental Indenture]

EX-5.1

Exhibit 5.1

Boston Brussels Chicago Düsseldorf London Los Angeles Miami Milan Munich

New York Orange County Paris Rome San Diego Silicon Valley Washington, D.C.

Strategic alliance with MWE China Law Offices (Shanghai)

September 1, 2011

Merge Healthcare Incorporated
200 E. Randolph Street
24th Floor
Chicago, Illinois 60601-6436

Re: Registration Statement on Form S-4 Relating to $52,000,000 Aggregate Principal
Amount of 11.75% Senior Secured Notes due 2015

Ladies and Gentlemen:

We have acted as special counsel to Merge Healthcare Incorporated, a Delaware corporation (the “Company”), and certain of the Company’s subsidiaries that are signatories to the Indenture (together, the “Guarantors”), in connection with the preparation and filing with the U.S. Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Securities Act”), of a Registration Statement on Form S-4 (the “Registration Statement”) which includes a form of prospectus (the “Prospectus”) relating to the proposed exchange by the Company of $52,000,000 aggregate principal amount of its 11.75% Senior Secured Notes due 2015, which are to be registered under the Act (the “Exchange Notes”), for a like amount of its outstanding, unregistered 11.75% Senior Secured Notes due 2015 issued on June 20, 2011 (the “Outstanding Notes”). The Exchange Notes will be guaranteed as to the payment of principal and interest thereon (such guarantees, the “Guarantees” and, collectively, with the Exchange Notes, the “Securities”) by the Guarantors. The Securities will be issued pursuant to an indenture, dated as of April 28, 2010 as supplemented by the First Supplemental Indenture dated June 14, 2011 and the Second Supplemental Indenture dated June 20, 2011 (the “Indenture”), among the Company, the Guarantors and The Bank of New York Mellon Trust Company, N.A., as trustee and collateral agent (the “Trustee”).

In rendering the opinions set forth herein, we have examined and relied upon originals or copies of the following: (i) the Registration Statement; (ii) the Indenture; (iii) the form of the Exchange Note; and (iv) resolutions relating to the authorization and issuance of the Securities and the registration of the Securities with the Commission on the Registration Statement adopted by the Board of Directors of the Company and by the Board of Directors (or other governing body) of each of the Guarantors on June 20, 2011.

We have also examined and relied upon the originals or copies, certified or otherwise identified to our satisfaction, of such records of the Company and the Guarantors and such agreements, certificates of officers or representatives of the Company and others, and such other documents, certificates and corporate and other records as we have deemed necessary or appropriate as a basis for the opinions set forth herein. In our examination, we have assumed the legal capacity

of all natural persons, the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to the original documents of all documents submitted to us as copies, and the authenticity of the originals of such copies. As to any facts material to the opinions expressed herein which we did not independently establish or verify, we have relied upon statements and representations of officers and other representatives of the Company, the Guarantors and public officials.

Members of our firm are admitted to the Bar of the State of New York. We express no opinion as to the laws of any jurisdiction other than (i) the laws of the State of New York, (ii) the Delaware General Corporation Law, the applicable provisions of the Delaware Constitution and reported judicial decisions interpreting the Delaware General Corporation Law and the Delaware Constitution, and (iii) the federal laws of the United States of America.

In rendering our opinions below, we have assumed that: (i) the Trustee is and has been duly organized, validly existing and in good standing under the laws of its jurisdiction of organization and is duly qualified to engage in the activities contemplated by the Indenture; (ii) the Indenture has been duly authorized, executed and delivered by, and constitutes the legal, valid and binding obligation of, the Trustee, enforceable against the Trustee in accordance with its terms; (iii) the Trustee is in compliance, generally and with respect to acting as a trustee under the Indenture, with all applicable laws and regulations; (iv) the Trustee had and has the requisite organizational and legal power and authority to perform its obligations under the Indenture; and (v) the Exchange Notes will be duly authenticated by the Trustee in the manner provided in the Indenture.

The opinions set forth herein are subject in each case to the following qualifications, limitations and exceptions: (i) enforcement may be limited by applicable bankruptcy, reorganization, insolvency, moratorium or other laws affecting creditors’ rights generally from time to time in effect and by general principles of equity, including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing, regardless of whether considered in a proceeding in equity or at law; and (ii) we express no opinion as to the effect of any federal or state laws regarding fraudulent conveyances or transfers.

Based upon the foregoing and subject to the limitations, qualifications, exceptions and assumptions set forth herein, we are of the opinion that:

     (i) When duly executed by the Company and authenticated by the Trustee in accordance with the Indenture and issued and delivered in exchange for the Outstanding Notes pursuant to the exchange offer described in the Registration Statement, the Exchange Notes will be duly issued and will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms; and;

     (ii) Upon the due execution, authentication and issuance of the Exchange Notes in accordance with the Indenture and the delivery of the Exchange Notes in exchange for the Outstanding Notes pursuant to the exchange offer described in the Registration Statement, the Guarantees will constitute valid and binding obligations of the Guarantors, enforceable against the Guarantors in accordance with their terms.

We hereby consent to the filing of this opinion letter as an exhibit to the Registration Statement and to the reference to our Firm under the caption “Legal Matters” in the Prospectus. In giving this consent, we do not hereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission thereunder.

This opinion letter is limited to the matters expressly set forth herein and no opinion is implied or may be inferred beyond the matters expressly so stated. This opinion letter is given as of the date hereof and we do not undertake any liability or responsibility to inform you of any change in circumstances occurring, or additional information becoming available to us, after the date hereof which might alter the opinions contained herein.

Very truly yours,

/s/ McDermott Will & Emery LLP

EX-12.1

Exhibit 12.1

Computation of Ratio of Earnings to Fixed Charges

     The following table sets forth the calculation of the ratio of earnings to fixed charges of Merge Healthcare Incorporated for the periods indicated:

(in thousands, except for ratios)	Six Months Ended June 30,						Year ended December 31,
	2011			2010			2010			2009		2008			2007			2006
Rental expense	$	1,193		$	1,630		$	2,031		$	1,420	$	1,872		$	2,052		$	1,389
Imputed interest on rental expense (1)	$	274		$	375		$	467		$	327	$	431		$	472		$	319
Interest expense		13,106			4,321			17,218			2,716		1,750			89			67
Total fixed charges	$	13,380		$	4,696		$	17,685		$	3,043	$	2,181		$	561		$	386
Earnings
Pre-tax income (loss) from continuing operations		(403	)		(18,007	)		(25,162	)		150		(23,743	)		(171,808	)		(249,473	)
Add: Fixed charges (interest expense)		13,380			4,696			17,685			3,043		2,181			561			386
	$	12,977		$	(13,311	)	$	(7,477	)	$	3,193	$	(21,562	)	$	(171,247	)	$	(249,087	)
Ratio of Earnings to Fixed Charges	NA			NA				NA			1.0	NA			NA			NA
Dollar amount of deficiency	$	(403	)	$	(18,007	)		(25,162	)	NA		$	(23,743	)	$	(171,808	)	$	(249,473	)

(1) Assumes that the interest component of rental expense is 23% of total rental expense based on net present value analysis.

EX-23.1

Exhibit 23.1

Consent of Independent Registered Accounting Firm

Merge Healthcare Incorporated
Chicago, Illinois

We hereby consent to the incorporation by reference in the Prospectus constituting a part of this Registration Statement of our reports dated March 15, 2011, relating to the consolidated financial statements and the effectiveness of Merge Healthcare Incorporated’s internal control over financial reporting, appearing in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.

We also consent to the reference to us under the caption “Experts” in the Prospectus.

/s/ BDO USA, LLP

Chicago, Illinois
September 1, 2011

EX-23.2

Exhibit 23.2

Consent of Independent Registered Accounting Firm

Merge Healthcare Incorporated
Chicago, Illinois

We hereby consent to the incorporation by reference in the Prospectus constituting a part of this Registration Statement of our reports dated March 15, 2011, except for Note B which is as of September 1, 2011 and our report dated March 11, 2010, relating to the consolidated financial statements of Merge Healthcare Solutions Inc., formerly known as AMICAS, Inc., and AMICAS, Inc.

We also consent to the reference to us under the caption “Experts” in the Prospectus.

/s/ BDO USA, LLP

Chicago, Illinois
September 1, 2011

EX-23.3

Exhibit 23.3

Consent of Independent Registered Accounting Firm

We consent to the reference to our firm under the caption “Experts” in this Registration Statement (Form S-4 No. 333-           ) and related Prospectus of Merge Healthcare Incorporated for the registration of $52,000,000 of its 11.75% Senior Secured Notes due 2015 and to the incorporation by reference therein of our report dated March 25, 2009, with respect to the consolidated financial statements of Emageon Inc. included in its Annual Report (Form 10-K) for the year ended December 31, 2008, filed with the Securities and Exchange Commission.

/s/ Ernst & Young LLP

Boca Raton, Florida
September 1, 2011

EX-23.4

Exhibit 23.4

Consent of Independent Registered Accounting Firm

We consent to the incorporation by reference in this Registration Statement on Form S-4 of Merge Healthcare Incorporated of our report dated April 15, 2011, relating to our audit of the consolidated financial statements, which appears in the Annual Report on Form 10-K as amended by Form 10-K/A of Ophthalmic Imaging Systems for the year ended December 31, 2010.

We also consent to the reference our firm under the caption “Experts” in the Prospectus, which is part of this Registration Statement.

/s/ Perry-Smith, LLP

Sacramento, California
September 1, 2011

EX-25.1

Exhibit 25.1

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM T-1

STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE

CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A
TRUSTEE PURSUANT TO SECTION 305(b)(2)__

THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL ASSOCIATION

(Exact name of trustee as specified in its charter)

	95-3571558
(Jurisdiction of incorporation	(I.R.S. Employer
if not a U.S. national bank)	Identification No.)
700 South Flower Street,
Suite 500
Los Angeles, CA	90017
(Address of principal executive offices)	(Zip code)

Rhea L. Murphy, Legal Department
The Bank of New York Mellon Trust Company, National Association
700 South Flower Street, Suite 500
Los Angeles, California 90017
(213) 630-6476
(Name, address and telephone number of agent for service)

MERGE HEALTHCARE INCORPORATED
(Exact name of obligor as specified in its charter)

Delaware	39-1600938
(State or other jurisdiction	(I.R.S. Employer
of incorporation or organization)	Identification No.)
200 E. Randolph Street
24th Floor
Chicago, Illinois	60601-6436
(Address of principal executive offices)	(Zip code)

11.75% Senior Secured Notes due 2015
and Guarantees of 11.75% Senior Secured Notes due 2015
(Title of the indenture securities)

GUARANTORS

Exact Name of Obligor as	State or Other Jurisdiction of	I.R.S. Employer	Address of Principal
Specified in its Charter	Incorporation or Organization	Identification Number	Executive Offices
Abraxas Medical Solutions, Inc.	Delaware	26-1525385	200 E. Randolph Street 24th Floor Chicago, Illinois 60601-6436
AMICAS, Inc. (now Merge Healthcare Solutions Inc.)	Delaware	59-2248411	200 E. Randolph Street 24th Floor Chicago, Illinois 60601-6436
Confirma Europe LLC	Washington	N/A	200 E. Randolph Street 24th Floor Chicago, Illinois 60601-6436
Merge Asset Management Corp.	Delaware	N/A	200 E. Randolph Street 24th Floor Chicago, Illinois 60601-6436
Merge eClinical Inc.	Delaware	20-0308891	200 E. Randolph Street 24th Floor Chicago, Illinois 60601-6436
Ophthalmic Imaging Systems	California	94-3035367	200 E. Randolph Street 24th Floor Chicago, Illinois 60601-6436
Requisite Software Inc.	Delaware	27-1023435	200 E. Randolph Street 24th Floor Chicago, Illinois 60601-6436
Stryker Imaging Corporation	Delaware	65-1017159	200 E. Randolph Street 24th Floor Chicago, Illinois 60601-6436

Item 1. General Information.

     Furnish the following information as to the Trustee:

(a) Name and address of each examining or supervising authority to which it is subject.

          Comptroller of the Currency, Washington, D.C. 20219

          Federal Reserve Bank, San Francisco, California 94105

          Federal Deposit Insurance Corporation, Washington, D.C. 20429

(b) Whether it is authorized to exercise corporate trust powers.

     Yes.

Item 2. Affiliations with Obligor.

          If the obligor is an affiliate of the trustee, describe each such affiliation.

          None.

     Pursuant to General Instruction B of the Form T-1, no responses are included for Items 3-15 of this Form T-1 because the Obligor is not in default as provided under Item 13.

Item 16. List of Exhibits.

Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the “Act”) and 17 C.F.R. 229.10(d).

1.	A copy of the articles of association of The Bank of New York Mellon Trust Company, National Association. (Exhibit 1 to Form T-1 filed on September 8, 2008 with Registration Statement No. 333-135006).
2.	A copy of certificate of authority of the trustee to commence business. (Exhibit 2 to Form T-1 filed on January 11, 2005 with Registration Statement No. 333-121948).
3.	A copy of the authorization of the trustee to exercise corporate trust powers. (Exhibit 3 to Form T-1 filed on September 8, 2008 with Registration Statement No. 333-135006).
4.	A copy of the existing by-laws of the trustee. (Exhibit 4 to Form T-1 filed on October 28, 2009 with Registration Statement No. 333-162713).
6.	The consent of the trustee required by Section 321(b) of the Act.

7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority.

SIGNATURE

          Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the trustee, The Bank of New York Mellon Trust Company, National Association, a banking association organized and existing under the laws of the United States of America, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of Chicago, and State of Illinois on the 1st day of September, 2011.

THE BANK OF NEW YORK MELLON TRUST COMPANY,
NATIONAL ASSOCIATION

By:	/s/ Benita A. Vaughn
	Name:	Benita A. Vaughn
	Title:	Vice President

EXHIBIT 6

The consent of the Trustee required by Section 321 (b) of the Act

September 1, 2011

Securities and Exchange Commission
Washington, D.C. 20549

Ladies and Gentlemen:

In connection with the qualification of an indenture by and among Merge Healthcare Incorporated, the Guarantors named therein, and The Bank of New York Mellon Trust Company, National Association, as trustee, the undersigned, in accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended, hereby consents that the reports of examinations of the undersigned, made by Federal, State, Territorial, or District authorities authorized to make such examinations, may be furnished by such authorities to the Securities and Exchange Commission upon its request therefor.

The Bank of New York Mellon Trust Company,
	National Association
	By: Name:	/s/ Benita A. Vaughn Benita A. Vaughn
	Title:	Vice President

EXHIBIT 7

Consolidated Report of Condition of
THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL ASSOCIATION
of 700 South Flower Street, Suite 200, Los Angeles, CA 90017

     At the close of business June 30, 2011, published in accordance with Federal regulatory authority instructions.

	Dollar Amounts
	in Thousands
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin		1,624
Interest-bearing balances		186
Securities:
Held-to-maturity securities		0
Available-for-sale securities		828,663
Federal funds sold and securities purchased under agreements to resell:
Federal funds sold		60,500
Securities purchased under agreements to resell		0
Loans and lease financing receivables:
Loans and leases held for sale		0
Loans and leases, net of unearned income		0
LESS: Allowance for loan and lease losses		0
Loans and leases, net of unearned income and allowance		0
Trading assets		0
Premises and fixed assets (including capitalized leases)		8,561
Other real estate owned		0
Investments in unconsolidated subsidiaries and associated companies		0
Direct and indirect investments in real estate ventures		0
Intangible assets:
Goodwill		856,313
Other intangible assets		201,961
Other assets		146,990
Total assets	$	2,104,798

	Dollar Amounts
	in Thousands
LIABILITIES
Deposits:
In domestic offices		506
Noninterest-bearing		506
Interest-bearing		0
Not applicable
Federal funds purchased and securities sold under agreements to repurchase:
Federal funds purchased		0
Securities sold under agreements to repurchase		0
Trading liabilities		0
Other borrowed money: (includes mortgage indebtedness and obligations under capitalized leases)		268,691
Not applicable
Not applicable
Subordinated notes and debentures		0
Other liabilities		227,247
Total liabilities		496,444
Not Applicable
EQUITY CAPITAL
Perpetual preferred stock and related surplus		0
Common stock		1,000
Surplus (exclude all surplus related to preferred stock)		1,121,520
Not Available
Retained earnings		482,674
Accumulated other comprehensive income		3,160
Other equity capital components		0
Not Available
Total bank equity capital		1,608,354
Noncontrolling (minority) interests in consolidated subsidiaries		0
Total equity capital		1,608,354
Total liabilities and equity capital		2,104,798

     I, Karen Bayz, Chief Financial Officer of the above-named bank do hereby declare that the Reports of Condition and Income (including the supporting schedules) for this report date have been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and are true to the best of my knowledge and belief.

     Karen Bayz     )           Chief Financial Officer

     We, the undersigned directors (trustees), attest to the correctness of the Report of Condition (including the supporting schedules) for this report date and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true and correct.

Troy Kilpatrick, President	)
Frank P. Sulzberger, MD	)	Directors (Trustees)
William D. Lindelof, MD	)

EX-99.1

Exhibit 99.1

Letter of Transmittal

To Tender for Exchange
11.75% Senior Secured Notes Due 2015
of
MERGE HEALTHCARE INCORPORATED
Pursuant to the Prospectus Dated            , 2011

THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., EASTERN STANDARD TIME, ON            , 2011, UNLESS EXTENDED (SUCH TIME AND DATE, AS THE SAME MAY BE EXTENDED FROM TIME TO TIME, THE “EXPIRATION DATE”). TENDERS MAY BE WITHDRAWN AT ANY TIME PRIOR THE EXPIRATION DATE.

The Exchange Agent for the Exchange Offer is:

The Bank of New York Mellon

By Registered and Certified Mail:

The Bank of New York Mellon
Corporate Trust Operations
Reorganization Unit
101 Barclay Street — 7 East
New York, NY 10286
Attn: [          ]

By Regular Mail or Overnight Courier:

The Bank of New York Mellon
Corporate Trust Operations
Reorganization Unit
101 Barclay Street — 7 East
New York, NY 10286
Attn: [          ]

In Person by Hand Only:

The Bank of New York Mellon
Corporate Trust Operations
Reorganization Unit
101 Barclay Street — 7 East
New York, NY 10286
Attn: [          ]

By Facsimile (eligible institutions only): (212) 298-1915

For Information or Confirmation by Telephone: [          ]

DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA FACSIMILE TO A NUMBER, OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.

The undersigned acknowledges receipt of the Prospectus dated                    , 2011 (the “Prospectus”), of Merge Healthcare Incorporated, a Delaware corporation (the “Company”), and this Letter of Transmittal (the “Letter of Transmittal”), which together with the Prospectus constitutes the Company’s offer (the “Exchange Offer”) to exchange $2,000 principal amount of its 11.75% Senior Secured Notes Due 2015 (the “Exchange Notes”) for each $2,000 principal amount of its outstanding 11.75% Senior Secured Notes Due 2015 (the “Old Notes”), and integral multiples of $1,000 in excess thereof. Recipients of the Prospectus should read the requirements described in such Prospectus with respect to eligibility to participate in the Exchange Offer. Capitalized terms used but not defined herein have the meaning given to them in the Prospectus.

The undersigned hereby tenders the Old Notes described in the box entitled “Description of Old Notes” below pursuant to the terms and conditions described in the Prospectus and this Letter of Transmittal. The undersigned is the registered holder of all the Old Notes (the “Holder”) and the undersigned represents that it has received from each beneficial owner of Old Notes (the “Beneficial Owners”) a duly completed and executed form of “Instruction to Registered Holder from Beneficial Owner” accompanying this Letter of Transmittal, instructing the undersigned to take the action described in this Letter of Transmittal.

PLEASE READ CAREFULLY THIS ENTIRE LETTER OF TRANSMITTAL AND COMPLETE ALL BOXES BELOW.

This Letter of Transmittal is to be used by a Holder (i) if certificates representing Old Notes are to be forwarded herewith and (ii) if a tender is made pursuant to the guaranteed delivery procedures in the section of the Prospectus entitled “The Exchange Offer — Guaranteed Delivery Procedures.”

Holders that are tendering by book-entry transfer to the Exchange Agent’s account at DTC can execute the tender through ATOP for which the Exchange Offer will be eligible. DTC participants that are accepting the Exchange Offer must transmit their acceptance to DTC which will verify the acceptance and execute a book-entry delivery to the Exchange Agent’s account at DTC. DTC will then send an agent’s message forming part of a book-entry transfer in which the participant agrees to be bound by the terms of the Letter of Transmittal (an “Agent’s Message”) to the Exchange Agent for its acceptance. Transmission of the Agent’s Message by DTC will satisfy the terms of the Exchange Offer as to execution and delivery of a Letter of Transmittal by the participant identified in the Agent’s Message.

Any Beneficial Owner whose Old Notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender should contact such Holder promptly and instruct such Holder to tender on behalf of the Beneficial Owner. If such Beneficial Owner wishes to tender on its own behalf, such Beneficial Owner must, prior to completing and executing this Letter of Transmittal and delivering its Old Notes, either make appropriate arrangements to register ownership of the Old Notes in such Beneficial Owner’s name or obtain a properly completed bond power from the Holder. The transfer of record ownership may take considerable time.

In order to properly complete this Letter of Transmittal, a Holder must (i) complete the box entitled “Description of Old Notes,” (ii) if appropriate, check and complete the boxes relating to book-entry transfer, guaranteed delivery, Special Issuance Instructions and Special Delivery Instructions, (iii) sign the Letter of Transmittal by completing the box entitled “Sign Here To Tender Your Old Notes” and (iv) complete the Substitute Form W-9. Each Holder should carefully read the detailed instructions below prior to completing this Letter of Transmittal.

Holders of Old Notes who desire to tender their Old Notes for exchange and (i) whose Old Notes are not immediately available or (ii) who cannot deliver their Old Notes, this Letter of Transmittal and all other documents required hereby to the Exchange Agent on or prior to the Expiration Date, must tender the Old Notes pursuant to the guaranteed delivery procedures set forth in the section of the Prospectus entitled “The Exchange Offer — Guaranteed Delivery Procedures.” See Instruction 2.

Holders of Old Notes who wish to tender their Old Notes for exchange must complete columns (1) through (3) in the box below entitled “Description of Old Notes,” and sign the box below entitled “Sign Here To Tender Your Old Notes.” If only those columns are completed, such Holder will have tendered for exchange all Old Notes listed in column (3) below. If the Holder wishes to tender for exchange less than all of such Old Notes, column (4) must be completed in full. In such case, such Holder should refer to Instruction 5.

2

The Exchange Offer may be extended, terminated or amended, as provided in the Prospectus. During any such extension of the Exchange Offer, all Old Notes previously tendered and not withdrawn pursuant to the Exchange Offer will remain subject to such Exchange Offer.

The undersigned hereby tenders for exchange the Old Notes described in the box entitled “Description of Old Notes” below pursuant to the terms and conditions described in the Prospectus and this Letter of Transmittal.

DESCRIPTION OF OLD NOTES
	(2)	(3)	(4)
(1)	Certificate	Aggregate Principal	Principal Amount of
Name(s) and Address(es) of	Number(s)	Amount of Original	Old Notes
Registered Holder(s)	(Attach signed list,	Notes Represented by	Tendered
(Please fill in, if blank)	if necessary)	Certificate(s)*	(if less than all)**
Total Principal Amount of Old Notes Tendered:
* Unless indicated in this column, any tendering Holder will be deemed to have tendered the entire aggregate principal amount represented by the Old Notes indicated in the column labeled “Aggregate Principal Amount Represented by Certificate(s).” See Instruction 5.
** The minimum permitted tender is $2,000 in principal amount of Old Notes. All other tenders must be in integral multiples of $1,000.

o  CHECK HERE IF CERTIFICATES FOR TENDERED OLD NOTES ARE ENCLOSED HEREWITH.

o   CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY ENCLOSED HEREWITH AND COMPLETE THE FOLLOWING (FOR USE BY ELIGIBLE INSTITUTIONS ONLY):

Name(s) of Holder(s) of Old Notes: 

Window Ticket Number(s) (if any): 

Date of Execution of the Notice of Guaranteed Delivery: 

Name of Institution which Guaranteed Delivery: 

Only Holders are entitled to tender their Old Notes for exchange in the Exchange Offer. Any financial institution that is a participant in DTC’s system and whose name appears on a security position listing as the record owner of the Old Notes and who wishes to make book-entry delivery of Old Notes as described above must complete and execute a participant’s letter (which will be distributed to participants by DTC) instructing DTC’s nominee to tender such Old Notes for exchange. Persons who are Beneficial Owners of Old Notes but are not Holders and who seek to tender Old Notes should (i) contact the Holder and instruct such Holder to tender on its behalf, (ii) obtain and include with this Letter of Transmittal, Old Notes properly endorsed for transfer by the Holder or accompanied by a properly completed bond power from the Holder, with signatures on the endorsement or bond power guaranteed by a firm that is an eligible guarantor institution within the meaning of Rule 17Ad-15 under the Exchange Act, including a firm that is a member of a registered national securities exchange, a member of the Financial Industry Regulatory Authority, Inc., a commercial bank or trading company having an office in the United States or certain other eligible guarantors (each, an “Eligible Institution”), or (iii) effect a record transfer of such Old Notes from the Holder to such Beneficial Owner and comply with the requirements applicable to Holders for tendering Old Notes prior to the Expiration Date. See the section of the Prospectus entitled “The Exchange Offer — Procedures for Tendering.”

3

SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE ACCOMPANYING
INSTRUCTIONS CAREFULLY.

1. PLEASE FILL IN YOUR NAME AND ADDRESS BELOW IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.

Name: ­ ­

Address: ­ ­

2. If the undersigned is not a broker-dealer, the undersigned represents that it acquired the Exchange Notes in the ordinary course of its business, it is not engaged in, and does not intend to engage in, a distribution of Exchange Notes and it has no arrangements or under standings with any person to participate in a distribution of the Exchange Notes. If the undersigned is a broker-dealer that will receive Exchange Notes for its own account in ex change for Securities, it represents that the Securities to be exchange for Exchange Notes were acquired by it as a result of market-making activities or other trading activities and acknowledges that it will deliver a prospectus in connection with any resale of such Exchange Notes; however, by so acknowledging and by delivering a prospectus, the under signed will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.

4

SPECIAL ISSUANCE INSTRUCTIONS
(See Instructions 1, 6, 7, 8 and 9)

  To be completed ONLY (i) if the Exchange Notes issued in exchange for the Old Notes, certificates for Old Notes in a principal amount not exchanged for Exchange Notes, or Old Notes (if any) not tendered for exchange, are to be issued in the name of someone other than the undersigned or (ii) if Old Notes tendered by book-entry transfer which are not exchanged are to be returned by credit to an account maintained at DTC.

Issue to:

Name: 

Address: 

Credit Old Notes not exchanged and delivered by book-entry transfer to DTC account set forth below:

(Account Number)

SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 6, 7, 8 and 9)

  To be completed ONLY (i) if the Exchange Notes issued in exchange for Old Notes, certificates for Old Notes in a principal amount not exchanged for Exchange Notes, or Old Notes (if any) not tendered for exchange, are to be mailed or delivered (i) to someone other than the undersigned or (ii) to the undersigned at an address other than the address shown below the undersigned’s signature.

Mail or deliver to:

Name: 

(Please Type or Print)

Address: 

(Include Zip Code)

(Taxpayer Identification or
Social Security No.)

5

Ladies and Gentlemen:

Upon the terms and subject to the conditions of the Exchange Offer, the undersigned hereby tenders to the Company for exchange the Old Notes indicated above. Subject to, and effective upon, acceptance for exchange of the Old Notes tendered for exchange herewith, the undersigned will have irrevocably sold, assigned, transferred and exchanged, to the Company, all right, title and interest in, to and under all of the Old Notes tendered for exchange hereby, and hereby will have appointed the Exchange Agent as the true and lawful agent and attorney-in-fact (with full knowledge that the Exchange Agent also acts as agent of the Company) of such Holder with respect to such Old Notes, with full power of substitution to (i) deliver certificates representing such Old Notes, or transfer ownership of such Old Notes on the account books maintained by DTC (together, in any such case, with all accompanying evidences of transfer and authenticity), to the Company, (ii) present and deliver such Old Notes for transfer on the books of the Company and (iii) receive all benefits and otherwise exercise all rights and incidents of beneficial ownership with respect to such Old Notes, all in accordance with the terms of the Exchange Offer. The power of attorney granted in this paragraph shall be deemed to be irrevocable and coupled with an interest.

The undersigned hereby represents and warrants that it has full power and authority to tender, exchange, assign and transfer the Old Notes; and that when such Old Notes are accepted for exchange by the Company, the Company will acquire good and marketable title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claims. The undersigned further warrants that it will, upon request, execute and deliver any additional documents deemed by the Exchange Agent or the Company to be necessary or desirable to complete the exchange, assignment and transfer of the Old Notes tendered for exchange hereby. The undersigned further agrees that acceptance of any and all validly tendered Old Notes by the Company and the issuance of Exchange Notes in exchange therefor shall constitute performance in full by the Company of its obligations under the Registration Rights Agreement.

By tendering, the undersigned hereby further represents to the Company that (i) the Exchange Notes to be acquired by the undersigned in exchange for the Old Notes tendered hereby and any Beneficial Owner(s) of such Old Notes in connection with the Exchange Offer will be acquired by the undersigned and such Beneficial Owner(s) in the ordinary course of their respective businesses, (ii) the undersigned is not engaged in, and does not intend to engage in, a distribution of the Exchange Notes, (iii) the undersigned does not have an arrangement or understanding with any person to engage in the distribution of the Exchange Notes in violation of the provisions of the Securities Act, (iv) the undersigned and each Beneficial Owner acknowledge and agree that any person who is a broker-dealer registered under the Exchange Act or is participating in the Exchange Offer for the purpose of distributing the Exchange Notes must comply with the registration and prospectus delivery requirements of Section 10 of the Securities Act in connection with a secondary resale transaction of the Exchange Notes acquired by such person and cannot rely on the position of the staff of the Commission set forth in certain no-action letters, (v) the undersigned and each Beneficial Owner understand that a secondary resale transaction described in clause (iv) above and any resales of Exchange Notes obtained by the undersigned in exchange for the Old Notes acquired by the undersigned directly from the Company should be covered by an effective registration statement containing the selling securityholder information required by Item 507 or Item 508, as applicable, of Regulation S-K of the Commission and (vi) neither the undersigned nor any Beneficial Owner is an “affiliate,” as defined under Rule 405 under the Securities Act, of the Company or any guarantor of the Exchange Notes.

If the undersigned is a broker-dealer that will receive New Notes for its own account in exchange for Old Notes that were acquired as a result of market-making activities or other trading activities, it acknowledges that it will deliver a prospectus meeting the requirements of Section 10 of the Securities Act in connection with any resale of such Exchange Notes; however, by so acknowledging and by delivering such prospectus, the undersigned will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act. A broker-dealer may not participate in the Exchange Offer with respect to the Old Notes acquired other than as a result of market-making activities or other trading activities.

For purposes of the Exchange Offer, the Company will be deemed to have accepted for exchange, and to have exchanged, validly tendered Old Notes, if, as and when the Company gives oral or written notice thereof to the Exchange Agent. Tenders of Old Notes for exchange may be withdrawn at any time prior to 5:00 p.m., eastern Standard Time, on the Expiration Date. See “The Exchange Offer — Withdrawal Rights” in the Prospectus. Any Old Notes tendered by the undersigned and not accepted for exchange will be returned to the undersigned at the address set forth above unless otherwise indicated in the box above entitled “Special Delivery Instructions” promptly after the Expiration Date.

6

The undersigned acknowledges that the Company’s acceptance of Old Notes validly tendered for exchange pursuant to any one of the procedures described in the section of the Prospectus entitled “The Exchange Offer” and in the instructions hereto will constitute a binding agreement between the undersigned and the Company upon the terms and subject to the conditions of the Exchange Offer.

Unless otherwise indicated in the box entitled “Special Issuance Instructions,” please return any Old Notes not tendered for exchange in the name(s) of the undersigned. Similarly, unless otherwise indicated in the box entitled “Special Delivery Instructions,” please mail any certificates for Old Notes not tendered or exchanged (and accompanying documents, as appropriate) to the undersigned at the address shown below the undersigned’s signature(s). In the event that both “Special Issuance Instructions” and “Special Delivery Instructions” are completed, please issue the certificates representing the Exchange Notes issued in exchange for the Old Notes accepted for exchange in the name(s) of, and return any Old Notes not tendered for exchange or not exchanged to, the person(s) so indicated. The undersigned recognizes that the Company has no obligation pursuant to the “Special Issuance Instructions” and “Special Delivery Instructions” to transfer any Old Notes from the name of the Holder(s) thereof if the Company does not accept for exchange any of the Old Notes so tendered for exchange or if such transfer would not be in compliance with any transfer restrictions applicable to such Old Note(s).

In order to validly tender Old Notes for exchange, Holders must complete, execute and deliver this Letter of Transmittal.

Except as stated in the Prospectus, all authority herein conferred or agreed to be conferred shall survive the death, incapacity or dissolution of the undersigned, and any obligation of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned. Except as otherwise stated in the Prospectus, this tender for exchange of Old Notes is irrevocable.

7

SIGN HERE TO TENDER YOUR OLD NOTES
(To Be Completed By All Tendering Holders)
(Complete accompanying Substitute Form W-9 also)

x: ­ ­	­ ­, 2011
x: ­ ­	­ ­, 2011
(Signature(s) of Owner(s))	(Date)

Area Code and Telephone Number: 

Must be signed by the Holder(s) exactly as name(s) appear(s) on certificate(s) representing the Old Notes or on a security position listing or by person(s) authorized to become registered Old Note holder(s) by certificates and documents transmitted herewith. If signature is by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, please provide the following information. (See Instruction 6.)

Name(s): 

(Please Type or Print)

Title: 

Capacity: 

Address: 

(Including Zip Code)

SIGNATURE GUARANTEE
(Signatures must be guaranteed if required by Instruction 1)

Signature Guaranteed by an Eligible Institution: 

(Authorized Signature)

(Title)

(Name and Firm)

Dated:          , 2011

8

INSTRUCTIONS
Forming Part of the Terms and Conditions of the Exchange Offer

1. Guarantee of Signatures.  Except as otherwise provided below, all signatures on this Letter of Transmittal must be guaranteed by an institution which is (1) a member of a registered national securities exchange or of the Financial Industry Regulatory Authority, Inc., (2) a commercial bank or trust company having an office or correspondent in the United States, or (3) an Eligible Institution that is a member of one of the following recognized Signature Guarantee Programs:

(a) The Securities Transfer Agents Medallion Program (STAMP);

(b) The New York Stock Exchange Medallion Signature Program (MSP); or

(c) The Stock Exchange Medallion Program (SEMP).

Signatures on this Letter of Transmittal need not be guaranteed (i) if this Letter of Transmittal is signed by the Holder(s) of the Old Notes tendered herewith and such Holder(s) have not completed the box entitled “Special Issuance Instructions” or the box entitled “Special Delivery Instructions” on this Letter of Transmittal or (ii) if such Old Notes are tendered for the account of an Eligible Institution. In all other cases, all signatures must be guaranteed by an Eligible Institution.

2. Delivery of this Letter of Transmittal and Old Notes; Guaranteed Delivery Procedures.  This Letter of Transmittal is to be completed by Holders if certificates representing Old Notes are to be forwarded herewith. All physically delivered Old Notes, as well as a properly completed and duly executed Letter of Transmittal (or manually signed facsimile thereof) and any other required documents, must be received by the Exchange Agent at its address set forth herein prior to the Expiration Date or the tendering holder must comply with the guaranteed delivery procedures set forth below. Delivery of the documents to DTC does not constitute delivery to the Exchange Agent.

The method of delivery of Old Notes, this Letter of Transmittal and all other required documents to the Exchange Agent is at the election and risk of the Holder. Except as otherwise provided below, the delivery will be deemed made only when actually received or confirmed by the Exchange Agent. Instead of delivery by mail, it is recommended that Holders use an overnight or hand delivery service, properly insured. In all cases, sufficient time should be allowed to assure delivery to the Exchange Agent before the Expiration Date. Neither this Letter of Transmittal nor any Old Notes should be sent to the Company. Holders may request their respective brokers, dealers, commercial banks, trust companies or nominees to effect the above transactions for such Holders.

Holders of Old Notes who elect to tender Old Notes and (i) whose Old Notes are not immediately available or (ii) who cannot deliver the Old Notes, this Letter of Transmittal or other required documents to the Exchange Agent prior the Expiration Date must tender their Old Notes according to the guaranteed delivery procedures set forth in the Prospectus. Holders may have such tender effected if:

(a) such tender is made through an Eligible Institution;

(b) prior to 5:00 p.m., Eastern Standard Time, on the Expiration Date, the Exchange Agent has received from such Eligible Institution a properly completed and duly executed Notice of Guaranteed Delivery, setting forth the name and address of the Holder, the certificate number(s) of such Old Notes and the principal amount of Old Notes tendered for exchange, stating that tender is being made thereby and guaranteeing that, within three New York Stock Exchange trading days after the Expiration Date, this Letter of Transmittal (or facsimile thereof), together with the certificate(s) representing such Old Notes (or a Book-Entry Confirmation), in proper form for transfer, and any other documents required by this Letter of Transmittal, will be deposited by such Eligible Institution with the Exchange Agent; and

(c) a properly executed Letter of Transmittal (or facsimile thereof), as well as the certificate(s) for all tendered Old Notes in proper form for transfer or a Book-Entry Confirmation, together with any other documents required by this Letter of Transmittal, are received by the Exchange Agent within three New York Stock Exchange trading days after the Expiration Date.

No alternative, conditional or contingent tenders will be accepted. All tendering Holders, by execution of this Letter of Transmittal (or facsimile thereof), waive any right to receive notice of the acceptance of their Old Notes for exchange.

9

3. Inadequate Space.  If the space provided in the box entitled “Description of Old Notes” above is inadequate, the certificate numbers and principal amounts of the Old Notes being tendered should be listed on a separate signed schedule affixed hereto.

4. Withdrawals.  A tender of Old Notes may be withdrawn at any time prior to the Expiration Date by delivery of written notice of withdrawal (or facsimile thereof) to the Exchange Agent at the address set forth on the cover of this Letter of Transmittal. To be effective, a notice of withdrawal of Old Notes must (i) specify the name of the person who tendered the Old Notes to be withdrawn (the “Depositor”), (ii) identify the Old Notes to be withdrawn (including the certificate number(s) and aggregate principal amount of such Old Notes), and (iii) be signed by the Holder in the same manner as the original signature on the Letter of Transmittal by which such Old Notes were tendered (including any required signature guarantees). All questions as to the validity, form and eligibility (including time of receipt) of such notices will be determined by the Company in its sole discretion, whose determination shall be final and binding on all parties. Any Old Notes so withdrawn will thereafter be deemed not validly tendered for purposes of the Exchange Offer and no Exchange Notes will be issued with respect thereto unless the Old Notes so withdrawn are validly retendered. Properly withdrawn Old Notes may be retendered by following one of the procedures described in the section of the Prospectus entitled “The Exchange Offer — Procedures for Tendering” at any time prior to the Expiration Date.

5. Partial Tenders.  Tenders of Old Notes will be accepted only in multiples of $2,000 principal amount and integral multiples of $1,000 in excess of $2,000. If a tender for exchange is to be made with respect to less than the entire principal amount of any Old Notes, fill in the principal amount of Old Notes which are tendered for exchange in column (4) of the box entitled “Description of Old Notes,” as more fully described in the footnotes thereto. In the case of a partial tender for exchange, a new certificate, in fully registered form, for the remainder of the principal amount of the Old Notes, will be sent to the Holders unless otherwise indicated in the appropriate box on this Letter of Transmittal promptly after the expiration or termination of the Exchange Offer.

6. Signatures on this Letter of Transmittal, Powers of Attorney and Endorsements.

(a) The signature(s) of the Holder on this Letter of Transmittal must correspond with the name(s) as written on the face of the Old Notes without alteration, enlargement or any change whatsoever.

(b) If tendered Old Notes are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal.

(c) If any tendered Old Notes are registered in different names on several certificates, it will be necessary to complete, sign and submit as many separate copies of this Letter of Transmittal and any necessary or required documents as there are different registrations or certificates.

(d) When this Letter of Transmittal is signed by the Holder listed and transmitted hereby, no endorsements of Old Notes or bond powers are required. If, however, Old Notes not tendered or not accepted, are to be issued or returned in the name of a person other than the Holder, then the Old Notes transmitted hereby must be endorsed or accompanied by a properly completed bond power, in a form satisfactory to the Company, in either case signed exactly as the name(s) of the Holder(s) appear(s) on the Old Notes. Signatures on such Old Notes or bond powers must be guaranteed by an Eligible Institution (unless signed by an Eligible Institution).

(e) If this Letter of Transmittal or Old Notes or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and unless waived by the Company, evidence satisfactory to the Company of their authority to so act must be submitted with this Letter of Transmittal.

(f) If this Letter of Transmittal is signed by a person other than the Holder listed, the Old Notes must be endorsed or accompanied by a properly completed bond power, in either case signed by such Holder exactly as the name(s) of the Holder appear(s) on the certificates. Signatures on such Old Notes or bond powers must be guaranteed by an Eligible Institution (unless signed by an Eligible Institution).

7. Backup Withholding; Substitute Form W-9.  Under United States federal income tax law, a Holder whose tendered Old Notes are accepted for exchange may be subject to backup withholding (currently at a 28% rate and scheduled to increase to 31% under current law for payments beginning in 2011) on payments that may be made by the Company on account of Exchange Notes issued pursuant to the Exchange Offer. To prevent backup withholding, each Holder of

10

tendered Old Notes must provide to the Exchange Agent such Holder’s correct taxpayer identification number (“TIN”) by completing the Substitute Form W-9 below, certifying that the Holder is a United States citizen or other United States person, that the TIN provided is correct (or that the Holder is awaiting a TIN), and that (i) the Holder is exempt from backup withholding, (ii) the Holder has not been notified by the Internal Revenue Service (the “IRS”) that the Holder is subject to backup withholding as a result of a failure to report all interest or dividends, or (iii) the IRS has notified the Holder that the Holder is no longer subject to backup withholding. A U.S. person is (i) an individual who is a U.S. citizen or U.S. resident alien, (ii) a partnership, corporation, company or association created or organized in the United States or under the laws of the United States, (iii) an estate (other than a foreign estate) or (iv) a domestic trust (as defined in Treasury Regulations Section 301.7701-7). If the Exchange Agent is not provided with the correct TIN, the tendering Holder may be subject to penalties imposed by the IRS. In addition, the Holder may be subject to backup withholding on all reportable payments made on account of the Exchange Notes after the exchange.

If the Holder is an individual, the TIN is generally his or her social security number. If the Holder is a nonresident alien or a foreign entity not subject to backup withholding, the Holder must provide to the Exchange Agent the appropriate completed Form W-8 rather than a Substitute Form W-9. These forms may be obtained from the Exchange Agent. See the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 (the “W-9 Guidelines”) for additional instructions. If the Old Notes are in more than one name or are not in the name of the actual owner, the tendering holder should consult the W-9 Guidelines for information regarding which TIN to report. Certain Holders (including, among others, corporations) may not be subject to these backup withholding requirements. Please consult the W-9 Guidelines for more information. Such exempt Holders must nevertheless enter their name, address, status and TIN, check the “Exempt Payee” box in Part 3 of the Substitute Form W-9, and sign, date and return the Substitute Form W-9 to the Exchange Agent.

If the Holder whose Old Notes are tendered does not have a TIN or does not know its TIN, the Holder should check the box in Part 2 of the Substitute Form W-9, write “Applied For” in lieu of its TIN in Part 1, sign and date the form and provide it to the Exchange Agent. In addition, such Holder also must sign and date the Certificate of Awaiting Taxpayer Identification Number. A Holder that does not have a TIN should consult the W-9 Guidelines for instructions on applying for a TIN. Note: Checking the box in Part 2 of the Substitute Form W-9 and writing “Applied For” in Part 1 means that the Holder has already applied for a TIN or that the Holder intends to apply for one in the near future. If a Holder checks the box in Part 2 and writes “Applied For” in Part 1, backup withholding at the applicable rate will nevertheless apply to all reportable payments made to such Holder. If such a Holder furnishes its properly certified TIN to the Exchange Agent within 60 days of the Exchange Agent’s receipt of the Substitute Form W-9, however, any amounts so withheld shall be refunded to such Holder. If, however, the Holder has not provided the Exchange Agent with its TIN within such 60-day period, such previously retained amounts will be remitted to the IRS as backup withholding.

Backup withholding is not an additional federal income tax. Rather, the federal income tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in overpayment of taxes, a refund may be obtained from the IRS, provided the required information is timely furnished to the IRS.

8. Transfer Taxes.  Holders whose Old Notes are tendered for exchange will not be obligated to pay any transfer taxes in connection therewith. If, however, the Exchange Notes are delivered to, or are to be issued in the name of, any person other than the Holder of the Old Notes tendered hereby, or if tendered Old Notes are registered in the name of any person other than the person signing this Letter of Transmittal, or if a transfer tax is imposed for any reason other than the exchange of Old Notes in connection with the Exchange Offer, the amount of any such transfer taxes (whether imposed on the Holder or any other persons) will be payable by the Holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted herewith, the amount of such transfer taxes will be billed directly to such Holder.

9. Special Issuance and Delivery Instructions.  If the Exchange Notes are to be issued, or if any Old Notes not tendered for exchange are to be issued or sent to someone other than the Holder or to an address other than that shown above, the appropriate boxes on this Letter of Transmittal should be completed. Holders of Old Notes tendering Old Notes by book-entry transfer may request that Old Notes not accepted be credited to such account maintained at DTC as such Holder may designate.

10. Irregularities.  All questions as to the validity, form, eligibility (including time of receipt), compliance with conditions, acceptance and withdrawal of tendered Old Notes will be determined by the Company in its sole discretion, which determination shall be final and binding. The Company reserves the absolute right to reject any and all Old Notes

11

not properly tendered or any Old Notes the Company’s acceptance of which would, in the opinion of counsel for the Company, be unlawful. The Company also reserves the right to waive any defects, irregularities or conditions of tender as to particular Old Notes. The Company’s interpretation of the terms and conditions of the Exchange Offer (including the instructions in this Letter of Transmittal) will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Old Notes must be cured within such time as the Company shall determine. Although the Company intends to notify Holders of defects or irregularities with respect to tenders of Old Notes, neither the Company, the Exchange Agent nor any other person shall incur any liability for failure to give such notification. Tenders of Old Notes will not be deemed to have been made until such defects or irregularities have been cured or waived. Any Old Notes received by the Exchange Agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned by the Exchange Agent to the tendering holders, unless otherwise provided in this Letter of Transmittal, promptly following the Expiration Date.

11. Waiver of Conditions.  The Company reserves the absolute right to waive, amend or modify certain of the specified conditions as described under “The Exchange Offer — Conditions to the Exchange Offer” in the Prospectus in the case of any Old Notes tendered (except as otherwise provided in the Prospectus).

12. Mutilated, Lost, Stolen or Destroyed Old Notes.  Any tendering Holder whose Old Notes have been mutilated, lost, stolen or destroyed, should contact the Exchange Agent at the address indicated herein for further instructions.

13. Requests for Information or Additional Copies.  Requests for information or for additional copies of the Prospectus and this Letter of Transmittal may be directed to the Exchange Agent at the address or telephone number set forth on the cover of this Letter of Transmittal.

IMPORTANT: This Letter of Transmittal (or a facsimile thereof) together with certificates, or confirmation of book-entry or the Notice of Guaranteed Delivery, and all other required documents must be received by the Exchange Agent prior the Expiration Date.

12

TO BE COMPLETED BY ALL TENDERING HOLDERS

(See Instruction 5)

SUBSTITUTE FORM W-9	Part 1 — PLEASE PROVIDE YOUR TIN IN THE BOX AT THE RIGHT AND CERTIFY BY SIGNING AND DATING BELOW	TIN: ­ ­Social Security Number OR Employee Identification Number
Department of the Treasury Internal Revenue Service	Part 2 — TIN applied for o CERTIFICATION-UNDER PENALTIES OF PERJURY, I CERTIFY THAT:
Payor’s Request for Taxpayer Identification Number (“TIN”) and Certification	(1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me).
	(2) I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (the “IRS”) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding, and
	(3) I am a U.S. person (including a U.S. resident alien).
	Signature ­ ­  Date ­ ­
You must cross out item (2) of the above certification if you have been notified by the IRS that you are subject to backup withholding because of under reporting of interest or dividends on your tax returns and you have not been notified by the IRS that you are no longer subject to backup withholding.

YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED
THE BOX IN PART 2 OF SUBSTITUTE FORM W-9

CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER

I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (1) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration office or (2) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number at the time of payment, 28% (scheduled to increase to 31% under current law for payments beginning in 2011) of all reportable payments made to me thereafter will be withheld until I provide a number.

Signature: ­ ­ Date: ­ ­

Name (Please Print) 

13

GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9

Guidelines for Determining the Proper Identification Number for the Payee (You) to Give the Payer — Social Security numbers have nine digits separated by two hyphens: i.e., 000-00-0000. Employer identification numbers have nine digits separated by only one hyphen: i.e., 00-0000000. The table below will help determine the number to give the payer. All “Section” references are to the Internal Revenue Code of 1986, as amended. “IRS” is the Internal Revenue Service.

		Give the name
		and social security
For this type of account:		number of—
1	Individual	The individual
2.	Two or more individuals (joint account)	The actual owner of the account or, if combined funds, the first individual on the account(1)
3.	Custodian account of a minor (Uniform Gift to Minors Act)	The minor(2)
4.	a. The usual revocable savings trust (grantor is also trustee)	The grantor-trustee(1)
	b. So-called trust account that is not a legal or valid trust under state law	The actual owner(1)
5.	Sole proprietorship or single-owner LLC	The owner(3)
6.	Sole proprietorship or single-member LLC	The owner(3)

		Give the name and
		employer identification
For this type of account:		number of—
7.	A valid trust, estate, or pension trust	The legal entity(4)
8.	Corporation or LLC electing corporate status on Form 8832	The corporation or LLC
9.	Association, club, religious, charitable, educational, or other tax-exempt organization	The organization
10.	Partnership or multi-member LLC	The partnership
11.	A broker or registered nominee	The broker or nominee
12.	Account with the Department of Agriculture in the name of a public entity (such as a state or local government, school district, or prison) that receives agricultural program payments	The public entity

(1) List first and circle the name of the person whose number you furnish. If only one person on a joint account has a Social Security number, that person’s number must be furnished.

(2)	Circle the minor’s name and furnish the minor’s Social Security number.
(3)	You must show your individual name, but you may also enter your business or “doing business as” name. You may use either your Social Security number or your employer identification number (if you have one).
(4)	List first and circle the name of the legal trust, estate, or pension trust. (Do not furnish the taxpayer identification number of the personal representative or trustee unless the legal entity itself is not designated in the account title.)

NOTE: If no name is circled when there is more than one name listed, the number will be considered to be that of the first name listed.

14

GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9

Obtaining a Number

If you do not have a taxpayer identification number, apply for one immediately. To apply for a Social Security number, get Form SS-5, Application for a Social Security Card, from your local Social Security Administration office. Get Form W-7, Application for IRS Individual Taxpayer Identification Number, to apply for a taxpayer identification number, or Form SS-4, Application for Employer Identification Number, to apply for an employer identification number. You can get Forms W-7 and SS-4 from the IRS by calling 1 (800) TAX-FORM, or from the IRS Web Site at www.irs.gov.

Payees Exempt From Backup Withholding

Payees specifically exempted from backup withholding include:

1.	An organization exempt from tax under Section 501(a), an individual retirement account (IRA), or a custodial account under Section 403(b)(7) if the account satisfies the requirements of Section 401(f)(2).
2.	The United States or any of its agencies or instrumentalities.
3.	A state, the District of Columbia, a possession of the United States, or any of their political subdivisions or instrumentalities.
4.	A foreign government or any of its political subdivisions, agencies or instrumentalities.
5.	An international organization or any of its agencies or instrumentalities.

Payees that may be exempt from backup withholding include:

1.	A corporation.
2.	A foreign central bank of issue.
3.	A dealer in securities or commodities required to register in the United States, the District of Columbia, or a possession of the United States.
4.	A futures commission merchant registered with the Commodity Futures Trading Commission.
5.	A real estate investment trust.
6.	An entity registered at all times during the tax year under the Investment Company Act of 1940.
7.	A common trust fund operated by a bank under Section 584(a).
8.	A financial institution.
9.	A middleman known in the investment community as a nominee or custodian.
10.	A trust exempt from tax under Section 664 or described in Section 4947.

Payments of interest not generally subject to backup with holding include the following:

1.	Payments of interest on obligations issued by individuals. NOTE: You may be subject to backup withholding if this interest is $600 or more and is paid in the course of the payer’s trade or business and you have not provided your correct taxpayer identification number to the payer.
2.	Payments otherwise subject to U.S. Federal income tax withholding.

Exempt payees described above should file a Form W-9 to avoid possible erroneous backup withholding. File this Form with the payer, furnish your taxpayer identification number, write “Exempt” on the face of the form, sign and date the form and return it to the payer. If you are a nonresident alien or a foreign entity not subject to backup withholding, file with the payer a completed IRS Form W-8BEN (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and instructions) or, if applicable, Form W-8ECI (Certificate of Foreign Person’s Claim for Exemption from Withholding on Income Effectively Connected With the Conduct of a Trade or Business in the United States).

Privacy Act Notice.  Section 6109 requires you to provide your correct taxpayer identification number to payers who must file information returns with the IRS to report interest, dividends, and certain other income paid to you to the IRS. The IRS uses the numbers for identification purposes and to help verify the accuracy of your return and may also provide this information to various government agencies for tax enforcement or litigation purposes and to cities, states, and the District of Columbia to carry out their tax laws, and may also disclose this information to other countries under a tax treaty, or to Federal and state agencies to enforce Federal nontax criminal laws and to combat terrorism. Payers must be given the numbers whether or not recipients are required to file tax returns. Payers must generally withhold 28% (scheduled to increase to 31% under current law for payments beginning in 2011) of taxable interest, dividend, and certain other payments to a payee who does not furnish a taxpayer identification number to a payer. Certain penalties may also apply.

Penalties

(1)	Failure to Furnish Taxpayer Identification Number.  If you fail to furnish your correct taxpayer identification number to a payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect.
(2)	Civil Penalty for False Information with Respect to Withholding.  If you make a false statement with no reasonable basis that results in no backup withholding, you are subject to a $500 penalty.
(3)	Criminal Penalty for Falsifying Information.  Willfully falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment.
(4)	Misuse of Taxpayer Identification Number.  If the requester discloses or uses taxpayer identification numbers in violation of Federal law, the requester may be subject to civil and criminal penalties.

FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE.

15

EX-99.2

Exhibit 99.2

NOTICE OF GUARANTEED DELIVERY
With Respect to Tender of
Any and All Outstanding 11.75% Senior Secured Notes due 2015
In Exchange For
11.75% Senior Secured Notes due 2015
of
MERGE HEALTHCARE INCORPORATED
Pursuant to the Prospectus dated            , 2011

THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., EASTERN STANDARD TIME, ON            , 2011, UNLESS EXTENDED (SUCH TIME AND DATE, AS THE SAME MAY BE EXTENDED FROM TIME TO TIME, THE “EXPIRATION DATE”). TENDERS MAY BE WITHDRAWN AT ANY TIME PRIOR THE EXPIRATION DATE.

The Exchange Agent for the Exchange Offer is:

The Bank of New York Mellon

By Registered and Certified Mail:

The Bank of New York Mellon

Corporate Trust Operations

Reorganization Unit

101 Barclay Street — 7 East

New York, NY 10286

Attn: [          ]

By Regular Mail or Overnight Courier:

The Bank of New York Mellon

Corporate Trust Operations

Reorganization Unit

101 Barclay Street — 7 East

New York, NY 10286

Attn: [          ]

In Person by Hand Only:

The Bank of New York Mellon

Corporate Trust Operations

Reorganization Unit

101 Barclay Street — 7 East

New York, NY 10286

Attn: [          ]

By Facsimile (eligible institutions only): (212) 298-1915

For Information or Confirmation by Telephone: [          ]

DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION TO A FACSIMILE NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.

As set forth in the prospectus (the “Prospectus”) dated               , 2011 of Merge Healthcare Incorporated (the “Company”) and in the accompanying Letter of Transmittal and instructions thereto (the “Letter of Transmittal”), this form or one substantially equivalent thereto must be used to accept the Company’s offer (the “Exchange Offer”) to exchange new 11.75% Senior Secured Notes due 2015 (the “Exchange Notes”) that have been registered under the Securities Act of 1933, as amended (the “Securities Act”), for all of its outstanding 11.75% Senior Secured Notes due 2015 (the “Old Notes”) if the Letter of Transmittal or any other documents required thereby cannot be delivered to the Exchange Agent, or Old Notes cannot be delivered or if the procedures for book-entry transfer cannot be completed prior to the Expiration Date. This form may be delivered by an Eligible Institution (as defined in the Prospectus) by mail or hand delivery or transmitted via facsimile to the Exchange Agent as set forth above. Capitalized terms used but not defined herein shall have the meaning given to them in the Prospectus.

This form is not to be used to guarantee signatures. If a signature on the Letter of Transmittal is required to be guaranteed by an Eligible Institution under the instructions thereto, such signature guarantee must appear in the applicable space provided in the Letter of Transmittal.

2

PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY

Ladies and Gentlemen:

The undersigned hereby tenders to the Company upon the terms and subject to the conditions set forth in the Prospectus and the related Letter of Transmittal, receipt of which is hereby acknowledged, the principal amount of Old Notes specified below pursuant to the guaranteed delivery procedures set forth in the section of the Prospectus entitled “The Exchange Offer — Guaranteed Delivery Procedures.” By so tendering, the undersigned does hereby make, at and as of the date hereof, the representations and warranties of a tendering Holder of Old Notes set forth in the Letter of Transmittal.

The undersigned understands that tenders of Old Notes may be withdrawn if the Exchange Agent receives at one of its addresses specified on the cover of this Notice of Guaranteed Delivery, prior to the Expiration Date, a facsimile transmission or letter which specifies the name of the person who deposited the Old Notes to be withdrawn and the aggregate principal amount of Old Notes delivered for exchange, including the certificate number(s) (if any) of the Old Notes, and which is signed in the same manner as the original signature on the Letter of Transmittal by which the Old Notes were tendered, including any signature guarantees, all in accordance with the procedures set forth in the Prospectus.

All authority herein conferred or agreed to be conferred shall survive the death, incapacity or dissolution of the undersigned and every obligation of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned.

Name(s) of Registered Holder(s): 

(Please Print or Type)

Signature(s): 

Address(es): 

Area Code(s) and Telephone Number(s): 

If the Old Notes will be delivered by book-entry transfer at DTC, insert Depository Account Number: 

Date: 

	Principal Amount of
	Old
Certificate Number(s)*	Notes Tendered**
* Need not be completed if the Old Notes being tendered are in book-entry form.
** Must be in minimum denominations of $2,000 principal amount and integral multiples of $1,000 in excess thereof.

3

This notice of guaranteed delivery must be signed by the registered holder(s) of Old Notes exactly as its (their) name(s) appear on the certificate(s) for such Old Notes or on a security position listing as the owner of Old Notes, or by person(s) authorized to become registered holder(s) by endorsements and documents transmitted with this notice of guaranteed delivery. If the signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer or other person acting in a fiduciary or representative capacity, you must provide the following information:

Name(s): 

Title(s): 

Signature(s): 

Address(es): 

DO NOT SEND ORIGINAL NOTES WITH THIS FORM. OLD NOTES SHOULD BE SENT TO THE EXCHANGE AGENT TOGETHER WITH A PROPERLY COMPLETED AND DULY EXECUTED LETTER OF TRANSMITTAL.

4

GUARANTEE OF DELIVERY
(NOT TO BE USED FOR SIGNATURE GUARANTEE)

The undersigned, a participant in a recognized Signature Guarantee Medallion Program, guarantees deposit with the Exchange Agent of the Letter of Transmittal (or facsimile thereof), together with the Old Notes tendered hereby in proper form for transfer, or confirmation of the book-entry transfer of such Old Notes into the Exchange Agent’s account at The Depository Trust Company, pursuant to the procedure for book-entry transfer set forth in the Prospectus, and any other required documents, all by 5:00 p.m., Eastern Standard Time, on the third New York Stock Exchange trading day following the Expiration Date (as defined in the Prospectus).

Name of Firm: ­ ­	­ ­
	(Authorized Signature)
Address: ­ ­	Name: ­ ­
­ ­	Title: ­ ­
(Zip Code)
Telephone Number: ­ ­	Date: ­ ­

5

INSTRUCTIONS

1. Delivery of this Notice of Guaranteed Delivery.  A properly completed and duly executed copy of this Notice of Guaranteed Delivery and any other documents required by this Notice of Guaranteed Delivery must be received by the Exchange Agent at one of its addresses set forth on the cover hereof prior to the Expiration Date. The method of delivery of this Notice of Guaranteed Delivery and all other required documents to the Exchange Agent is at the election and risk of the Holder but, except as otherwise provided below, the delivery will be deemed made only when actually received by the Exchange Agent. Instead of delivery by mail, it is recommended that Holders use an overnight or hand delivery service, properly insured. If such delivery is by mail, it is recommended that the Holder use properly insured, registered mail with return receipt requested. For a full description of the guaranteed delivery procedures, see the Prospectus under the caption “The Exchange Offer — Guaranteed Delivery Procedures.” In all cases, sufficient time should be allowed to assure timely delivery. No Notice of Guaranteed Delivery should be sent to the Company.

2. Signature on this Notice of Guaranteed Delivery; Guarantee of Signatures.  If this Notice of Guaranteed Delivery is signed by the Holder(s) referred to herein, then the signature must correspond with the name(s) as written on the face of the Old Notes without alteration, enlargement or any change whatsoever. If this Notice of Guaranteed Delivery is signed by a person other than the Holder(s) listed, this Notice of Guaranteed Delivery must be accompanied by a properly completed bond power signed as the name of the Holder(s) appear(s) on the face of the Old Notes without alteration, enlargement or any change whatsoever. If this Notice of Guaranteed Delivery is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing, and, unless waived by the Company, evidence satisfactory to the Company of their authority so to act must be submitted with this Notice of Guaranteed Delivery.

3. Requests for Assistance or Additional Copies.  Questions relating to the Exchange Offer or the procedure for consenting and tendering as well as requests for assistance or for additional copies of the Prospectus, the Letter of Transmittal and this Notice of Guaranteed Delivery, may be directed to the Exchange Agent at the address set forth on the cover hereof or to your broker, dealer, commercial bank or trust company.

6

EX-99.3

Exhibit 99.3

Letter to DTC Participants
With Respect to Tender of
Any and All Outstanding 11.75% Senior Secured Notes due 2015
In Exchange For
11.75% Senior Secured Notes due 2015
of

MERGE HEALTHCARE INCORPORATED

Pursuant to the Prospectus dated          , 2011

THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., EASTERN STANDARD TIME, ON          , 2011, UNLESS EXTENDED (SUCH TIME AND DATE, AS THE SAME MAY BE EXTENDED FROM TIME TO TIME, THE “EXPIRATION DATE”). TENDERS MAY BE WITHDRAWN AT ANY TIME PRIOR THE EXPIRATION DATE.

To Securities Dealers, Commercial Banks, Trust Companies and Other Nominees:

Enclosed for your consideration is a Prospectus dated          , 2011 (the “Prospectus”) and a Letter of Transmittal (the “Letter of Transmittal”) that together constitute the offer (the “Exchange Offer”) by Merge Healthcare Incorporated, a Delaware corporation (the “Company”), to exchange up to $52,000,000 in principal amount of its 11.75% Senior Secured Notes due 2015 (the “Exchange Notes”), which have been registered under the Securities Act of 1933, as amended (the “Securities Act”), for any and all outstanding 11.75% Senior Secured Notes due 2015, issued and sold on June 20, 2011 in a transaction exempt from registration under the Securities Act (the “Old Notes”), upon the terms and conditions set forth in the Prospectus. The Prospectus and Letter of Transmittal more fully describe the Exchange Offer. Capitalized terms used but not defined herein have the meanings given to them in the Prospectus.

We are asking you to contact your clients for whom you hold Old Notes registered in your name or in the name of your nominee. In addition, we ask you to contact your clients who, to your knowledge, hold Old Notes registered in their own name.

Enclosed are copies of the following documents:

1) The Prospectus;

2) The Letter of Transmittal for your use in connection with the tender of Old Notes and for the information of your clients;

3) The Notice of Guaranteed Delivery to be used to accept the Exchange Offer if the Old Notes and all other required documents cannot be delivered to the Exchange Agent prior to the Expiration Date;

4) A form of letter that may be sent to your clients for whose accounts you hold Old Notes registered in your name or the name of your nominee, with space provided for obtaining the clients’ instructions with regard to the Exchange Offer; and

5) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.

DTC participants will be able to execute tenders through the DTC Automated Tender Offer Program.

Please note that the Exchange Offer will expire at 5:00 p.m., Eastern Standard Time, on          , 2011, unless extended by the Company. We urge you to contact your clients as promptly as possible.

You will be reimbursed by the Company for customary mailing and handling expenses incurred by you in forwarding any of the enclosed materials to your clients.

Additional copies of the enclosed material may be obtained from the Exchange Agent, at the address and telephone numbers set forth below.

Very truly yours,

The Bank of New York Mellon

Corporate Trust Operations

Reorganization Unit

101 Barclay Street — 7 East

New York, NY 10286

[          ]

Nothing herein or in the enclosed documents shall constitute you or any person as an agent of the Company or the Exchange Agent, or authorize you or any other person to make any statements on behalf of either of them with respect to the Exchange Offer, except for statements expressly made in the Prospectus and the Letter of Transmittal.

2

EX-99.4

Exhibit 99.4

Letter to Beneficial Holders
With Respect to Tender of
Any and All Outstanding 11.75% Senior Secured Notes due 2015
In Exchange For
11.75% Senior Secured Notes due 2015
of
MERGE HEALTHCARE INCORPORATED
Pursuant to the Prospectus dated October 4, 2010

THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., EASTERN STANDARD TIME, ON NOVEMBER 2, 2010, UNLESS EXTENDED (SUCH TIME AND DATE, AS THE SAME MAY BE EXTENDED FROM TIME TO TIME, THE “EXPIRATION DATE”). TENDERS MAY BE WITHDRAWN AT ANY TIME PRIOR THE EXPIRATION DATE.

To Our Clients:

Enclosed for your consideration is a Prospectus dated October 4, 2010 (the “Prospectus”) and a Letter of Transmittal (the “Letter of Transmittal”) that together constitute the offer (the “Exchange Offer”) by Merge Healthcare Incorporated, a Delaware corporation (the “Company”), to exchange up to $52,000,000 in principal amount of its 11.75% Senior Secured Notes due 2015 (the “Exchange Notes”), which have been registered under the Securities Act of 1933, as amended (the “Securities Act”), for any and all outstanding 11.75% Senior Secured Notes due 2015, issued and sold in a transaction exempt from registration under the Securities Act (the “Old Notes”), upon the terms and conditions set forth in the Prospectus. The Prospectus and Letter of Transmittal more fully describe the Exchange Offer. Capitalized terms used but not defined herein have the meanings given to them in the Prospectus.

These materials are being forwarded to you as the beneficial owner of Old Notes carried by us for your account or benefit but not registered in your name. A tender of any Old Notes may be made only by us as the registered holder and pursuant to your instructions. Therefore, the Company urges beneficial owners of Old Notes registered in the name of a broker, dealer, commercial bank, trust company or other nominee to contact such registered holder promptly if they wish to tender Old Notes in the Exchange Offer.

Accordingly, we request instructions as to whether you wish us to tender any or all of your Old Notes, pursuant to the terms and conditions set forth in the Prospectus and Letter of Transmittal. We urge you to read carefully the Prospectus and Letter of Transmittal before instructing us to tender your Old Notes.

Your instructions to us should be forwarded as promptly as possible in order to permit us to tender Old Notes on your behalf in accordance with the provisions of the Exchange Offer. The Exchange Offer will expire at 5:00 p.m., Eastern Standard Time, on November 2, 2010. Old Notes tendered pursuant to the Exchange Offer may be withdrawn, subject to the procedures described in the Prospectus, at any time prior to the Expiration Date.

If you wish to have us tender any or all of your Old Notes held by us for your account or benefit, please so instruct us by completing, executing and returning to us the instruction form that appears below. The accompanying Letter of Transmittal is furnished to you for informational purposes only and may not be used by you to tender Old Notes held by us and registered in our name for your account or benefit.

INSTRUCTIONS TO REGISTERED HOLDER
FROM BENEFICIAL OWNER
OF 11.75% SENIOR SECURED NOTES DUE 2015
OF MERGE HEALTHCARE INCORPORATED

The undersigned acknowledge(s) receipt of your letter and the enclosed materials referred to therein relating to the Exchange Offer of the Company. Capitalized terms used but not defined herein have the meanings ascribed to them in the Prospectus.

This will instruct you to tender the principal amount of Old Notes indicated below held by you for the account or benefit of the undersigned, pursuant to the terms of and conditions set forth in the Prospectus and the Letter of Transmittal.

The aggregate face amount of the Old Notes held by you for the account of the undersigned is (fill in amount):

$      of the Old Notes.

With respect to the Exchange Offer, the undersigned hereby instructs you (check appropriate box):

To TENDER the following Old Notes held by you for the account of the undersigned (insert principal amount of Old Notes to be tendered, if any):

$      of the Old Notes.

NOT to TENDER any Old Notes held by you for the account of the undersigned.

If the undersigned instructs you to tender the Old Notes held by you for the account of the undersigned, it is understood that you are authorized (a) to make, on behalf of the undersigned (and the undersigned, by its signature below, hereby makes to you), the representations and warranties contained in the Letter of Transmittal that are to be made with respect to the undersigned as a beneficial owner of the Old Notes, including but not limited to the representations that (i) the undersigned’s principal residence is in the state of (fill in state)           , (ii) the undersigned is acquiring the Exchange Notes in the ordinary course of business of the undersigned, (iii) the undersigned is not engaged in, and does not intend to engage in, a distribution of the Exchange Notes and has no arrangement or understanding with any person to participate in the distribution of Exchange Notes, (iv) the undersigned acknowledges that any person who is a broker-dealer registered under the Exchange Act or is participating in the Exchange Offer for the purpose of distributing the Exchange Notes must comply with the registration and prospectus delivery requirements of Section 10 of the Securities Act in connection with a secondary resale transaction of the Exchange Notes acquired by such person and cannot rely on the position of the Staff of the Securities and Exchange Commission set forth in certain no action letters (See the section of the Prospectus entitled “The Exchange Offer — Resale of Exchange Notes”), (v) the undersigned understands that a secondary resale transaction described in clause (iv) above and any resales of Exchange Notes obtained by the undersigned in exchange for the Old Notes acquired by the undersigned directly from the Company should be covered by an effective registration statement containing the selling securityholder information required by Item 507 or Item 508, if applicable, of Regulation S-K of the Commission, (vi) the undersigned is not an “affiliate,” as defined in Rule 405 under the Securities Act, of the Company or any guarantor of the Exchange Notes, and (vii) if the undersigned is a broker-dealer that will receive Exchange Notes for its own account in exchange for Old Notes that were acquired as a result of market-making activities or other trading activities, it acknowledges that it will deliver a prospectus meeting the requirements of Section 10 of the Securities Act in connection with any resale of such Exchange Notes; however, by so acknowledging and by delivering such prospectus, the undersigned will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act; (b) to agree, on behalf of the undersigned, as set forth in the Letter of Transmittal; and (c) to take such other action as necessary under the Prospectus or the Letter of Transmittal to effect the valid tender of Old Notes.

The purchaser status of the undersigned is (check the box that applies):

o   A “Qualified Institutional Buyer” (as defined in Rule 144A under the Securities Act)

o   An “Institutional Accredited Investor” (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act))

o   A non “U.S. Person” (as defined in Regulation S under the Securities Act) that purchased the Private Notes outside the United States in accordance with Rule 904 under the Securities Act

o   Other (describe)

2

SIGN HERE

Name of Beneficial Owner(s): 

Signature(s): 

Name(s) (please print): 

Address: 

Principal place of business (if different from address listed above): 

Telephone Number(s): 

Taxpayer Identification or Social Security Number(s): 

Date: 

3

EX-99.5

EXHIBIT 99.5

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL INFORMATION

The following unaudited pro forma condensed consolidated financial information is based upon the historical financial statements of Merge Healthcare Incorporated (Merge, we, us or our) and AMICAS, Inc. (AMICAS) after giving effect to our acquisition of all of the issued and outstanding shares of AMICAS.

On April 28, 2010, we completed the acquisition of AMICAS for total transaction consideration of $223.9 million. Under the terms of the agreement, Merge acquired all 37,009,990 outstanding shares of AMICAS for $6.05 per share. In addition, shortly before the completion of the acquisition, AMICAS paid cash to holders of vested, in-the-money stock options for the difference between $6.05 per share and the exercise price of such options. Further, the holders of shares of restricted stock were paid $6.05 per share in cash. The total consideration paid to option and restricted stock holders was approximately $22.9 million. This acquisition was accounted for as a business combination using the acquisition method with Merge identified as the acquirer. The amounts allocated to purchased software, backlog, customer relationships, non-competes and trade names associated with the acquisition were estimated by us with the assistance of independent valuation specialists, primarily through the use of discounted cash flow techniques. The asset lives were determined based on projected future economic benefits and expected life cycles of the acquired intangible assets. The amount assigned to goodwill was not deductible for federal income tax purposes. In addition, there was no deferred tax liability arising from the acquisition of the identifiable intangible assets.

The following unaudited pro forma condensed consolidated financial information presents the historical statements of operations of Merge and AMICAS for the year ended December 31, 2010 and the period January 1, 2010 through April 27, 2010, respectively, giving pro forma effects as if the acquisition of AMICAS had occurred on January 1, 2010.

The historical financial information has been adjusted to give effect to pro forma events that are directly attributable to the acquisition, are factually supportable and have a recurring impact. The pro forma adjustments are based upon available information and assumptions that we believe are reasonable.

The unaudited pro forma condensed consolidated statement of operations is provided for informational purposes only and are not intended to represent or be indicative of the consolidated results of operations of Merge that would have been recorded had the acquisition of AMICAS been completed as of the date presented, and should not be taken as representative of future results of operations of the combined company. The unaudited pro forma condensed consolidated statement of operations does not reflect the impact of any potential operational efficiencies, cost savings or economies of scale that we may achieve with respect to the combined operations, and do not include costs directly attributable to the transactions that would not have been incurred as of dates of such statements.

The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the historical consolidated financial statements and accompanying notes contained in Merge’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010

1

MERGE HEALTHCARE INCORPORATED

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

For the Year Ended December 31, 2010

(In thousands of US Dollars, except for share data)

	Merge			Historical			Pro Forma			Pro Forma
	Healthcare			AMICAS			Adjustments			Combined
							(Note 3)
Total net sales	$	140,332		$	36,716		$	(22	)(1)	$	177,026
Cost of sales:
Product-related cost of sales		53,591			16,164			—			69,755
Depreciation, amortization and impairment		10,972			1,403			977	(2)		13,352
Total cost of sales		64,563			17,567			977			83,107
Gross margin		75,769			19,149			(999	)		93,919
Operating costs and expenses:
Sales and marketing		20,697			4,502			—			25,199
Product research and development		20,064			6,486			—			26,550
General and administrative		22,012			11,296			—			33,308
Acquistion-related expenses		9,674			8,439			(16,537	)(3)		1,576
Restructuring and other expenses		5,006			—			—			5,006
Depreciation and amortization		6,840			787			1,249	(4)		8,876
Total operating costs and expenses		84,293			31,510			(15,288	)		100,515
Operating income (loss)		(8,524	)		(12,361	)		14,289			(6,596	)
Total other income (expense)		(16,638	)		(23	)		(8,595	)(5)		(25,256	)
Income (loss) before income taxes		(25,162	)		(12,384	)		5,694			(31,852	)
Income tax expense (benefit)		(13,646	)		46			—			(13,600	)
Net income (loss)		(11,516	)		(12,430	)		5,694			(18,252	)
Preferred stock dividends		19,076			—			(12,812	)(6)		6,264
Net income (loss) available to common stockholders	$	(30,592	)	$	(12,430	)	$	18,506		$	(24,516	)
Net income (loss) per share — basic	$	(0.38	)							$	(0.30	)
Weighted average number of common shares outstanding — basic		80,231,427						2,429,507	(7)		82,660,934
Net income (loss) per share — diluted	$	(0.38	)							$	(0.30	)
Weighted average number of common shares outstanding — diluted		80,231,427						2,429,507	(7)		82,660,934

2

NOTES TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
(All amounts in thousands of U.S. dollars other than share and per share data)

Note 1.   Basis of Pro Forma Presentation

On April 28, 2010, Merge completed the acquisition of AMICAS, Inc. (AMICAS) through a tender offer for the outstanding shares of common stock of AMICAS at $6.05 per share in cash. Following the tender offer, Merge purchased the remaining shares pursuant to a merger of a subsidiary of Merge with and into AMICAS. Total transaction consideration was approximately $223,910 for the 37,009,990 outstanding shares. We financed the transaction with $200,000 of senior secured notes (Notes), cash already available at the two companies and proceeds of $41,750 from the issuance of preferred and common stock. The Notes were issued at 97.266% of the principal amount (resulting in net proceeds received of $194,532), are due in 2015, bear interest at 11.75% of principal (payable on May 1st and November 1st of each year) and were offered in a private placement pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended.. In connection with the Notes, we incurred issuance costs of $9,015. The issuance costs as well as the debt issuer discount are being amortized using the effective interest rate method over the term of the Notes.

We issued 41,750 shares of preferred stock and 7,515,000 shares of common stock for the $41,750 of proceeds received. The proceeds were allocated to preferred and common stock based upon the relative fair value of each instrument as estimated by us with the assistance of independent valuation specialists. As a result, we recorded net preferred stock of $26,850 and common stock of $14,900. Upon issuance of the preferred and common stock, we recorded a deemed dividend of $14,900 for the difference between the relative fair value of the preferred stock and the redemption value of $41,750. In the Merge Healthcare and AMICAS pro forma condensed consolidated statement of operations for the year ended December 31, 2010, the deemed dividend has been eliminated from the net income (loss) available to common shareholders as it is a non-recurring item.

The unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2010 is based on the historical financial statements of Merge and AMICAS after giving effect to the acquisition, as well as certain reclassifications and pro forma adjustments, and assumes that our acquisition of AMICAS occurred on January 1, 2010. It combines the historical results of Merge Healthcare for the year ended December 31, 2010 and AMICAS for the period January 1, 2010 to April 27, 2010, including pro forma adjustments.

The unaudited pro forma condensed consolidated financial data are presented for informational purposes only and are not necessarily indicative of the results of operations for future periods or the results that actually would have been realized had the acquisitions described above been consummated as of January 1, 2010.

Note 2.   Purchase Price and Purchase Price Allocation

The total purchase price for AMICAS was $223,910, which consisted of $6.05 per share in cash, without interest, for all 37,009,990 outstanding shares of AMICAS common stock. The purchase price for AMICAS was allocated to tangible and identifiable intangible assets acquired and liabilities assumed, based on their estimated fair values as of the acquisition date. The excess of the purchase price over the net tangible and identifiable intangible assets was recorded as goodwill. The purchase price for AMICAS was allocated as set forth in the following table:

	AMICAS
Current assets	$	46,090
Non-current assets		15,116
Intangible assets		64,400
Goodwill		130,384
Total assets acquired		255,990
Liabilities assumed		(32,080	)
Net assets acquired	$	223,910

3

NOTES TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL INFORMATION — (Continued)

The fair value of the AMICAS intangible assets is based on management’s estimates with the assistance of independent valuation specialists, primarily through the use of discounted cash flow techniques. The allocation to identified intangible assets and goodwill is set forth in the following table:

	AMICAS
Total Consideration	$	223,910
Allocation of purchase price:
Current assets		46,090
Non-current assets		15,116
Liabilities assumed		(32,080	)
Unallocated purchase price	$	194,784
	AMICAS
Allocations to identified intangible assets and goodwill:
Purchased software	$	19,200
Backlog		8,100
Customer relationships		30,400
Trade names		3,600
Non-competes		3,100
Goodwill (including acquired workforce)		130,384
	$	194,784

Useful lives of intangible assets for the purposes of these pro forma statements are set forth in the following table:

Estimated useful lives of identified intangible assets:

	Years
Purchased software		8.0
Backlog		4.7
Customer relationships		9.7
Non-competes		7.0
Trade names		12.0
Goodwill		Indefinite

The asset lives are determined based on projected future economic benefits and expected life cycles of the acquired intangible assets. For purposes of this pro forma information, purchased software, non-competes and trade names are being amortized on a straight line basis, which approximates the future economic benefit of these assets, and customer relationships and backlog are being amortized based on the projected future cash flows.

Note 3.   Pro Forma Adjustments

The following adjustments have been reflected in the Merge and AMICAS unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2010:

(1) To eliminate the historical sales between Merge and AMICAS.

4

NOTES TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL INFORMATION — (Continued)

(2) To record amortization related to the purchased and developed software recognized from the acquisition AMICAS and eliminate the historical amortization of developed software as set forth in the following table:

To eliminate the historical purchased and developed software amortization	$	(1,000	)
Amortization of purchased software and backlog		1,977
	$	977

(3)	To record the elimination of non-recurring acquisition-related expenses.
(4)	To record amortization related to the customer relationships, trade names and non-compete agreements recognized from Merge Healthcare’s acquisition of AMICAS and eliminate the historical amortization, as applicable, as set forth in the following table:

To eliminate the historical amortization of customer relationships, trade names and non-competes	$	(229	)
Amortization of acquired customer relationships, trade names and non-competes		1,478
	$	1,249

(5) To record interest expense, including amortization of debt discount and debt issuance costs, as if the debt were outstanding for the entire year, as set forth in the following table:

Interest expense at 11.75%	$	(7,833	)
Amortization of debt discount		(288	)
Amortization of debt issuance costs		(474	)
	$	(8,595	)

(6) To eliminate the preferred stock deemed dividend (as it is a non-recurring charge) and to record the 15% cumulative preferred stock dividend as if the preferred stock were outstanding for the entire year, as set forth in the following table:

To eliminate the preferred stock deemed dividend	$	(14,900	)
15% cumulative preferred stock dividends		2,088
	$	(12,812	)

(7) To record additional shares of Merge Healthcare Common Stock issued as if such shares were outstanding for the entire period, as set forth in the following table:

Total shares of Merge Healthcare Common Stock issued	7,515,000
Shares of common stock already included in weighted-average share calculation	(5,085,493	)
	2,429,507

5

EX-99.6

EXHIBIT 99.6

OPHTHALMIC IMAGING SYSTEMS

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND NOTES
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2011 AND 2010

INDEX

	Page
FINANCIAL STATEMENTS AND NOTES
Condensed Consolidated Balance Sheets (Unaudited)		F-2
Condensed Consolidated Statements of Operations (Unaudited)		F-3
Condensed Consolidated Statements of Comprehensive Loss (Unaudited)		F-4
Condensed Consolidated Statements of Cash Flows (Unaudited)		F-5
Notes to Condensed Consolidated Financial Statements (Unaudited)		F-6

F-1

Ophthalmic Imaging Systems

Condensed Consolidated Balance Sheets

	June 30,			December 31,
	2011			2010
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	1,857,132		$	3,905,910
Accounts receivable, net		4,323,544			4,088,269
Inventories, net		1,612,662			1,757,873
Prepaid expenses and other current assets		462,888			357,380
Total current assets		8,256,226			10,109,432
Furniture and equipment, net		423,528			470,717
Capitalized imaging software, net		84,121			168,239
Capitalized software development, net		191,802			383,607
AcerMed asset purchase, net		95,017			190,029
Goodwill		807,000			807,000
Customer relationship intangible assets, net		377,112			411,863
Other intangible assets, net		49,556			66,075
Other assets		32,739			12,524
Total assets	$	10,317,101		$	12,619,486
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	975,422		$	1,256,515
Accrued liabilities		1,451,043			1,709,616
Derivative liability financial instruments		1,489,483			1,698,416
Deferred extended warranty revenue-current portion		1,963,162			1,722,235
Customer deposits		291,126			312,731
Notes payable-current portion		2,454,443			1,518,099
Total current liabilities		8,624,679			8,217,612
Deferred extended warranty revenue, less current portion		319,164			251,785
Notes payable, less current portion		1,625,686			1,301,523
Total liabilities		10,569,529			9,770,920
Commitments and contingencies
Equity
Ophthalmic Imaging Systems’ stockholders’ equity:
Preferred stock, 20,000,000 shares authorized; 0 shares issued and outstanding at June 30, 2011 and December 31, 2010 Common stock, no par value, 100,000,000 shares authorized; 30,304,151 shares issued and outstanding at June 30, 2011 and December 31, 2010		21,737,041			21,708,743
Additional paid-in-capital		139,095			65,544
Accumulated deficit		(22,456,824	)		(19,284,427	)
Cumulative translation adjustment		(50,288	)		(58,368	)
Total Ophthalmic Imaging Systems’ stockholders’ equity		630,976			2,431,492
Noncontrolling interest		378,548			417,074
Total equity		(252,428	)		2,848,566
Total liabilities and stockholders’ equity	$	10,317,101		$	12,619,486

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

F-2

Ophthalmic Imaging Systems

Condensed Consolidated Statements of Operations

	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
	(Unaudited)
Sales — products	$	3,234,938		$	3,750,391		$	5,501,162		$	6,869,516
Cost of sales — products		1,399,471			1,221,225			2,610,259			2,357,134
Cost of sales — amortization		185,468			185,468			370,936			370,936
Gross profit — products		1,649,999			2,343,698			2,519,966			4,141,446
Sales — service		1,175,609			1,009,737			2,373,325			2,023,927
Cost of sales — service		653,010			507,255			1,328,598			1,052,631
Gross profit — service		522,599			502,482			1,044,727			971,296
Total net sales		4,410,547			4,760,128			7,874,487			8,893,443
Cost of sales		2,237,949			1,913,948			4,309,794			3,780,701
Gross profit		2,172,598			2,846,180			3,564,693			5,112,742
Operating expenses:
Sales and marketing		1,833,349			1,776,435			3,550,170			3,321,029
General and administrative		864,072			585,023			1,482,961			1,101,902
Research and development		926,618			862,499			1,776,024			1,706,697
Total operating expenses		3,624,038			3,223,957			6,809,155			6,129,628
Loss from operations		(1,451,441	)		(377,777	)		(3,244,462	)		(1,016,886	)
Other income (expense)
Change in fair value of derivative financial liabilities		(120,301	)		88,239			208,933			(680,366	)
Interest expense		(62,846	)		36,608			(107,948	)		58,035
Effective interest expense		(9,336	)		502,544			(26,897	)		411,104
Other expenses		(14,948	)		(54,353	)		(36,721	)		(106,074	)
Interest income		6,345			3,732			15,480			14,090
Total other (expense) income, net		(201,086	)		576,770			52,847			(303,211	)
Net (loss) income before taxes		(1,652,527	)		198,993			(3,191,615	)		(1,320,097	)
Income taxes		(6,445	)		(21,409	)		(19,307	)		(8,533	)
Net (loss) income		(1,658,972	)		177,584			(3,210,922	)		(1,328,630	)
Less: noncontrolling interest’s share		(28,879	)		2,351			(38,526	)		13,575
Net (loss) income attributable to Ophthalmic Imaging Systems	$	(1,630,093	)	$	179,935		$	(3,172,396	)	$	(1,315,055	)
Shares used in the calculation of basic earnings per share		30,304,151			28,097,181			30,304,151			27,307,900
Basic earnings per share	$	(0.05	)	$	0.01		$	(0.11	)	$	(0.05	)
Shares used in the calculation of diluted earnings per share		N/A			30,062,640			N/A			N/A
Diluted earnings per share	$	N/A		$	0.01		$	N/A		$	N/A

(1) The amount of anti-dilutive shares for the three months ended June 30, 2011 were 1,183,665. The amount of anti-dilutive shares for the six months ended June 30, 2011 and 2010 were 1,173,881 and 1,815,585, respectively.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

F-3

Ophthalmic Imaging Systems

Condensed Consolidated Statements of Comprehensive Loss

	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
	(Unaudited)						(Unaudited)
Net (loss) income attributable to Ophthalmic Imaging Systems	$	(1,630,093	)	$	179,935		$	(3,172,396	)	$	(1,315,055	)
Other comprehensive loss Foreign currency translation		(18,986	)		(78,868	)		8,080			(98,657	)
Comprehensive net (loss) income	$	(1,649,079	)	$	101,067		$	(3,164,316	)	$	(1,413,712	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

F-4

Ophthalmic Imaging Systems

Condensed Consolidated Statements of Cash Flows

	Six Months Ended June 30,
	2011			2010
	(Unaudited)
Operating activities:
Net loss	$	(3,210,923	)	$	(1,328,630	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization		114,150			147,555
Loss on disposal of equipment		—			1,541
Stock based compensation expense		28,298			19,127
Warranty Expense		60,034			111,800
Change in fair value of derivative liability financial instruments		(208,933	)		88,239
Amortization of AcerMed software license		95,012			95,012
Amortization of imaging software		84,118			84,118
Amortization of R&D		191,804			191,807
Amortization of prepaid financing related to note payable		—			22,195
Discount related to note payable		26,897			35,153
Amortization of customer relationship intangibles		60,651			32,405
Net increase in accounts receivable — customer		(510,077	)		(506,476	)
Provision for bad debt		275,706			16,764
Net decrease (increase) in inventories		143,617			(374,336	)
Net increase in prepaid and other assets		(105,508	)		(252,539	)
Net (increase) decrease in other assets		(29,689	)		19,766
Net decrease in accounts payable — related parties		—			(41,847	)
Net (decrease) increase in other liabilities other than short-term borrowings		(314,172	)		493,940
Net cash used in operating activities		(3,299,015	)		(1,144,406	)
Investing activities:
Purchase of furniture and equipment		(67,313	)		(124,151	)
Financing activities:
Principal payments on notes and leases payable		(446,220	)		12,820
Notes payable — Abraxas shareholders		3,497			109,759
Payments for financing fees		—			(10,960	)
Proceeds from equity investment					1,999,967
Proceeds from notes payable		1,000,000
Proceeds from refinance		750,000			—
Net cash provided by financing activities		1,307,277			2,111,586
Effect of exchange rate changes on cash and cash equivalents		10,272			(76,144	)
Net decrease in cash and equivalents		(2,048,778	)		766,885
Cash and equivalents, beginning of the period		3,905,910			5,406,239
Cash and equivalents, end of the period	$	1,857,132		$	6,173,124
Non-cash financing for the six months ended June 30, 2010:
— $250,000 of our convertible notes payable was converted into shares of our common stock.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

F-5

Ophthalmic Imaging Systems

Notes to Condensed Consolidated Financial Statements
Three and Six Month Periods ended June 30, 2011 and 2010
(Unaudited)

Note 1.   Critical Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated balance sheet as of June 30, 2011, condensed consolidated statements of operations for the three and six months ended June 30, 2011 and 2010, and the consolidated comprehensive loss and consolidated cash flows for the three and six months ended June 30, 2011 and 2010 have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnote disclosures required by GAAP for complete financial statements. It is suggested that these condensed financial statements be read in conjunction with the audited financial statements and notes thereto included in the Annual Report of Ophthalmic Imaging Systems’ (the “Company”) for the year ended December 31, 2010 on Form 10-K. In the opinion of management, the accompanying condensed consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of our financial position and results of operations for the periods presented. The results of operations for the period ended June 30, 2011 are not necessarily indicative of the operating results expected for the full year. Certain reclassifications have been made to prior period amounts to conform to classifications adopted in the current period.

Revenue Recognition

The Company’s revenue recognition policies are in compliance with applicable accounting rules and regulations including FASB Accounting Standards Codification Topic 985, Software, Topic 605, Revenue and Subtopic 25, Multiple-Element Arrangements. The significant deliverables in the multiple-element arrangements that the company engages in represent hardware and software product sales, installation and training services, and support services. These deliverables qualify for separate units of accounting. Under accounting for revenue with multiple element arrangements, the multiple components of the Company’s revenue are considered separate units of accounting in that revenue recognition occurs at different points of time for (1) product shipment, (2) installation and training services, and (3) service contracts based on performance or over the contract term as we incur expenses related to the contract revenue.

Revenue for products is recognized when title passes to the customer, which is upon shipment, provided there are no conditions to acceptance, including specific acceptance rights. If the Company make an arrangement that includes specific acceptance rights, revenue is recognized when the specific acceptance rights are met. Upon review, the Company concluded that consideration received from customer agreements is reliably measurable because the amount of the consideration is fixed and no specific refund rights are included in the arrangement. The Company defers 100% of the revenue from sales shipped during the period that we believe may be uncollectible. When contract terms include multiple elements that are considered separate units of accounting, the consideration is allocated at the inception of the arrangement to all deliverables using the relative selling price method, which allocates any discount in the arrangement to each deliverable on the basis of each deliverable’s selling price. The best estimate of selling price is determined in a manner that is consistent with that used to determine the price to sell the deliverable on a stand alone basis. Separation of consideration received in such arrangements is determined based on a selling price hierarchy for determining the selling price of a deliverable, which is based on available information in the following order: vendor-specific objective evidence, third-party evidence, or estimated selling price. The Company determines the selling price for deliverables based on vendor-specific objective evidence of selling price determined based on the price charged for each deliverable sold separately.

F-6

Ophthalmic Imaging Systems

Notes to Condensed Consolidated Financial Statements — (Continued)

Installation revenue is recognized when the installation is complete. Separate amounts are charged and assigned in the customer quote, sales order and invoice, for installation and training services. These amounts are determined based on fair value, which is calculated in accordance with industry and competitor pricing of similar services and adjustments according to market acceptance. There is no price reduction in the product price if the customer chooses not to have us complete the installation.

Extended product service contracts are offered to our customers and are generally entered into prior to the expiration of our one year product warranty. The revenue generated from these transactions is recognized over the contract period, normally one to four years.

The Company does not have a general policy for cancellation, termination, or refunds associated with the sale of our products and services. All items are on one quote/purchase order with payment terms specified for the whole order. Occasionally, the Company have customers who require specific acceptance tests and, accordingly, The Company does not recognize such revenue until these specific tests are met.

Tax Provision

Deferred taxes are calculated using the liability method, whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

The Company calculates its tax provision quarterly and determines the amount of our deferred tax asset that will more-likely-than-not be used in the future. In making this determination, the Company assesses the amount of our unlimited and capped net operating losses amounts the Company will more likely than not be able to use, as well as the deferred tax asset amount related to the temporary differences of the Company’s balance sheet accounts.

FASB Accounting Standards Codification Topic No. 740, Taxes, provides the accounting for uncertainty in income taxes recognized in a company’s financial statements. Topic 740 also prescribes a recognition threshold and measurement standard for the financial statement recognition and measurement of an income tax position taken or expected to be taken in a tax return. In addition, Topic 740 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. We apply Topic 740 to all of our tax positions.

The Company does not currently allocate taxes between the Company and its subsidiary, Abraxas, due to the immaterial impact of Abraxas on our tax provision.

Goodwill and Other Intangible Assets

The Company tests goodwill and other intangible assets for impairment on an annual basis and between annual tests if current events or circumstances require an interim impairment assessment. Goodwill is allocated to various reporting units, which are generally an operating segment or one reporting level below the operating segment. The Company compares the fair value of each reporting unit to its carrying amount to determine if there is potential goodwill impairment. If the fair value of a reporting unit is less than its carrying value, an impairment loss is recorded to the extent that the fair value of the goodwill within the reporting unit is less than the carrying value of its goodwill. The Company compares the fair values of other intangible assets to their carrying amounts. If the carrying amount of an intangible asset exceeds its fair value, an impairment loss is recognized. Fair values of goodwill and other intangible assets are determined based on discounted cash flows or appraised values, as appropriate.

F-7

Ophthalmic Imaging Systems

Notes to Condensed Consolidated Financial Statements — (Continued)

The Company has not recorded an impairment loss related to goodwill or other intangible assets during the three and six months ended June 30, 2011 and 2010, respectively.

Software Capitalization

In 2008, the Company capitalized our EMR and PM software that we acquired from AcerMed through the bankruptcy court. This software was purchased with the intention that it would be sold, leased or marketed, upon modification by the Company’s research and development team, to our customers. The amount that the Company capitalized for this software was $570,077. During the first three months of 2009, the Company began to sell this software and amortize this asset using the straight line method of amortization over the economic life of the asset, which we concluded to be three years. Our EMR and PM software was amortized during the three and six months ended June 30, 2011 in the amount of $47,506 and $95,012, respectively. The carrying value of this asset at June 30, 2011 and December 31, 2010 was $95,017 and $190,029, respectively.

The Company also capitalized the development costs incurred to prepare this software for sale. Development costs were capitalized once technological feasibility was established. The Company believes that the software was technologically feasible when it began to capitalize the costs because it had worked with a model/prototype that had been in the market before our acquisition. The amount of development that was capitalized in connection with this software is $1,150,831. During the first three months of 2009, the Company began to sell this software, and amortize this asset using the straight line method of amortization over the economic life of the asset, which we concluded to be three years. The amount of this asset that was amortized during the three and six months ended June 30, 2011 was $95,903 and $191,806, respectively. The carrying value of this asset at June 30, 2011 and December 31, 2010 was $191,801 and $383,607, respectively.

In 2008, the Company also capitalized $504,711 of costs associated with the development of a web-based software once technological feasibility was established. During the first three months of 2009, the Company began to sell this software and amortize this asset using the straight line method of amortization over the economic life of the asset, which we concluded to be three years. The amount of this asset that was amortized during the three and six months ended June 30, 2011 was $42,059 and $84,118, respectively. The carrying value of this asset at June 30, 2011 and December 31, 2010 was $84,121 and $168,239, respectively.

Warranty Reserve

The Company’s warranty reserve contains two components, a general product reserve recorded on a per product basis and a specific reserve. The product reserve is calculated based on a fixed dollar amount per product shipped each quarter. Specific reserves usually arise from the introduction of new products. When a new product is introduced, the Company reserve for specific problems arising from potential issues, if any. As issues are resolved, we reduce the specific reserve. These types of issues can cause our warranty reserve to fluctuate outside of sales fluctuations.

The Company estimates the cost of the various warranty services by taking into account the estimated cost of servicing routine warranty claims in the first year, including parts, labor and travel costs for service technicians. The Company analyzes the gross profit margin of our service department, the price of our extended warranty contracts, factor in the hardware costs of the various systems, and use a percentage to calculate the cost per system to use for the first year manufacturer’s warranty.

During the six months ended June 30, 2011 and 2010 the general warranty reserve increased from $172,725 to $197,334 and from $90,000 to $162,600 due to the increase in product shipments versus the amount of replacements, repairs or upgrades performed.

F-8

Ophthalmic Imaging Systems

Notes to Condensed Consolidated Financial Statements — (Continued)

Convertible Notes and Warrants

The Company issued convertible notes (the “Notes”) which are convertible into shares of our common stock and warrants (the “Warrants”) to purchase shares of our common stock. The anti-dilution provisions present in the conversion option of the Notes and Warrants trigger if we issue or sell any equity securities or securities convertible into equity, options or rights to purchase equity securities at a per share selling price less than the exercise price. Once triggered, the exercise price will be adjusted pursuant to a weighted-average formula. The fair value of the conversion option of the Note has been recorded in the balance sheet as a derivative financial liability. The fair value of the conversion option of the Note is determined based on a lattice valuation model and the changes in the fair value of the conversion option is reported in earnings each reporting period. As of June 30, 2011, and December 31, 2010, the total value of the conversion option was $28,863 and $70,400, respectively. The fair value of the Warrants has also been recorded in the balance sheet as derivative financial liabilities. The fair value of the Warrants is determined based on a lattice valuation model and the changes in the fair value are reported in earnings each reporting period. As of June 30, 2011, and December 31, 2010, the total value of the Warrants was $1,460,620 and $1,628,016, respectively.

Derivative Liability Financial Instruments

Derivative liability financial instruments are comprised of warrants to purchase shares of our common stock and embedded conversion options issued in connection with a convertible note. Anti-dilution provisions present in these instruments adjust the exercise price of the warrants and conversion price of the convertible debt if the Company sells any equity securities or securities convertible into equity, options or rights to purchase equity securities, at a per share selling price less than the exercise price pursuant to a weighted-average formula. The Company records all derivative liability financial instruments in the balance sheet within the Derivative Liability Financial Instruments statement caption at fair value. Changes in the fair values of these instruments are reported in the results of operations for the period. The Company does not hold any derivative liability financial instruments that reduce risk associated with hedging exposure and, accordingly, the Company has not designated any of its derivatives liability financial instruments as hedge instruments.

Principles of Consolidation

The consolidated financial statements include the accounts of OIS, Abraxas, the 63% investment in CCS, OIS’ branch in Europe, and OIS Global. All significant intercompany balances and transactions have been eliminated in consolidation.

Foreign currencies

The consolidated financial statements are presented in the reporting currency of Ophthalmic Imaging Systems, U.S. Dollars (“USD”). The functional currency for the Company’s OIS Europe branch and its 63% investment in CCS, is the European Union Euro (€). Accordingly, the balance sheet of OIS Europe and CCS is translated into USD using the exchange rate in effect at the balance sheet date. Revenues and expenses are translated using the average exchange rates in effect during the period. Translation differences are recorded directly in shareholders’ equity as “cumulative translation adjustment.” Gains or losses on transactions denominated in a currency other than the subsidiaries’ functional currency which arise as a result of changes in foreign exchange rates are recorded in the statement of operations. The statement of cash flows reflects the reporting currency equivalent of foreign currency cash flows using the exchange rates in effect at the time of the cash flow.

F-9

Ophthalmic Imaging Systems

Notes to Condensed Consolidated Financial Statements — (Continued)

Recently Issued Accounting Guidance

Adopted

On January 1, 2011, the Company adopted changes issued by the Financial Accounting Standards Board (FASB) to revenue recognition for multiple-deliverable arrangements. These changes require separation of consideration received in such arrangements by establishing a selling price hierarchy (not the same as fair value) for determining the selling price of a deliverable, which will be based on available information in the following order: vendor-specific objective evidence, third-party evidence, or estimated selling price; eliminate the residual method of allocation and require that the consideration be allocated at the inception of the arrangement to all deliverables using the relative selling price method, which allocates any discount in the arrangement to each deliverable on the basis of each deliverable’s selling price; require that a vendor determine its best estimate of selling price in a manner that is consistent with that used to determine the price to sell the deliverable on a standalone basis; and expand the disclosures related to multiple-deliverable revenue arrangements. The adoption of this update did not result in a change in the units of accounting, the way the Company allocates the arrangement consideration to various units of accounting or the pattern and timing of revenue recognition. The adoption of this Update did not have a material effect on the Consolidated Financial Statements.

On January 1, 2011, the Company adopted changes issued by the FASB to disclosure requirements for fair value measurements. Specifically, the changes require a reporting entity to disclose, in the reconciliation of fair value measurements using significant unobservable inputs (Level 3), separate information about purchases, sales, issuances, and settlements (that is, on a gross basis rather than as one net number). These changes were applied to the disclosures in Note 7 to the Consolidated Financial Statements.

On January 1, 2011, the Company adopted changes issued by the FASB to the testing of goodwill for impairment. These changes require an entity to perform all steps in the test for a reporting unit whose carrying value is zero or negative if it is more likely than not (more than 50%) that a goodwill impairment exists based on qualitative factors. This will result in the elimination of an entity’s ability to assert that such a reporting unit’s goodwill is not impaired and additional testing is not necessary despite the existence of qualitative factors that indicate otherwise. The adoption of these changes had no impact on the Consolidated Financial Statements.

On January 1, 2011, the Company adopted changes issued by the FASB to the disclosure of pro forma information for business combinations. These changes clarify that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. Also, the existing supplemental pro forma disclosures were expanded to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. The adoption of these changes had no impact on the Consolidated Financial Statements.

F-10

Ophthalmic Imaging Systems

Notes to Condensed Consolidated Financial Statements — (Continued)

Note 2.   Inventories

Inventories, which consist primarily of purchased system parts, subassemblies and assembled systems, are stated at the lower of cost (determined using the first-in, first-out method) or market.

Inventories consist of the following:

	As of		As of
	June 30, 2011		December 31, 2010
Raw materials	$	329,899	$	555,899
Work-in-process		453,134		520,824
Finished goods		829,629		681,150
	$	1,612,662	$	1,757,873

Note 3.   Loss Per Share

Basic loss per share, which excludes dilution, is computed by dividing loss available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other agreements to issue common stock, such as stock options, warrants or convertible debt, result in the issuance of common stock, which shares in the earnings of the Company. The treasury stock method is applied to determine the dilutive effect of convertible or exercisable securities in computing diluted earnings per share. The Company currently is in a loss position and does not calculate diluted earnings per share.

Note 4.   Related Party Transactions

U.M. AccelMed, Limited Partnership

As of June 30, 2011, U.M. AccelMed, Limited Partnership, an Israeli limited partnership (“AccelMed”) is our largest shareholder with 13,338,603 shares of our common stock or 44%. On June 24, 2009 AccelMed acquired 9,633,228 shares and a warrant to purchase up to 3,211,076 shares of our common stock for an aggregate purchase price of $3,999,972. The 1st installment warrant has an exercise price of $1.00 per share and expires on June 23, 2012. We recorded $3,552,599 of the aggregate purchase price of $3,999,972 to common stock, net of stock issuance costs and the remaining amount allocated to warrants. On May 26, 2010 the 2nd and final installment was completed, under which we issued to AccelMed 3,581,089 shares and a warrant to purchase up to 1,193,696 shares for an aggregate purchase price of $1,999,967. The 2^nd installment warrant has an exercise price of $1.00 per share and expires on June 23, 2012. We recorded $1,346,326 of the aggregate purchase price of $1,999,967 to common stock, net of stock issuance costs and the remaining amount allocated to warrants. The remaining 124,286 shares of common stock were purchased from MediVision Medical Imaging Ltd. on January 6, 2010 at a purchase price of $0.70 per share.

The warrants issued to AccelMed include certain anti-dilution provisions which trigger if we issue or sell any equity securities or securities convertible into equity, options or rights to purchase equity securities at a per share selling price less than the exercise price, then the exercise price will be adjusted pursuant to a weighted-average formula. We record the fair value of the warrants issued to AccelMed on June 24, 2009 and May 26, 2010, in the balance sheet as a derivative financial liability. The fair values of these warrants are determined based on a lattice valuation model and changes in the fair value of the warrants are reported in earnings each reporting period. As of June 30, 2011, and December 31, 2010, the total values of these warrants were $1,016,621 and $1,169,280, respectively.

F-11

Ophthalmic Imaging Systems

Notes to Condensed Consolidated Financial Statements — (Continued)

MediVision Medical Imaging Ltd.

As of June 30, 2011, MediVision Medical Imaging Ltd., an Israeli corporation (“MediVision”), is our second largest shareholder with 8,630,825 shares of our common stock, or 29%.

On October 21, 2009 we purchased substantially all the assets of MediVision (the “MediVision Asset Purchase”). At June 30, 2011, the carrying values of the assets acquired from MediVision were as follows: intangible assets related to customer relationships and goodwill were $377,112 and $807,000, respectively. During the three and six months ended June 30, 2011, the Company recognized revenue of $262,697 and $516,208 and net losses of $158,176 and $238,930, related to the business operations purchased in connection with the MediVision Asset Purchase. At June 30, 2011 the noncontrolling interest related to the business operations purchased from MediVision was $378,548.

Relationships

Gil Allon (our Chief Executive Officer), together with Noam Allon, President and Chief Executive Officer of MediVision, Gil Allon’s brother and a former director of OIS own 20.31% of MediVision’s ordinary shares. Ariel Shenhar (our Chief Financial Officer) owns 0.58% of MediVision’s ordinary shares.

CCS Pawlowski GmbH

CCS Pawlowski GmbH, a German corporation (“CCS”), was formerly a subsidiary of MediVision which owned 63% of CCS’ ownership interests. We acquired this ownership interest in connection with the MediVision Asset Purchase. After completion of the MediVision Asset Purchase all inter-company sales were eliminated upon consolidation.

MediStrategy, Ltd.

Effective January 1, 2010, OIS Global entered an agreement with MediStrategy Ltd., an Israeli company owned by Noam Allon (“MS”), for Mr. Allon’s consulting services. Under the agreement, MS will be compensated a monthly amount of approximately $18,000.

Note 5.   Share-based Compensation

At June 30, 2011, we have six active stock-based compensation plans (the “Plans”). Options granted under these plans generally have a term of ten years from the date of grant unless otherwise specified in the option agreement. The plans generally expire ten years from the inception of the plans. The majority of options granted under these agreements have a vesting period of three to four years. Incentive stock options under these plans are granted at fair market value on the date of grant and non-qualified stock options granted cannot be less than 85% of the fair market value on the date of grant.

F-12

Ophthalmic Imaging Systems

Notes to Condensed Consolidated Financial Statements — (Continued)

A summary of the changes in stock options outstanding under our equity-based compensation plans during the six months ended June 30, 2011 is presented below:

						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
				Exercise		Contractual		Intrinsic
	Shares			Price		Term (Years)		Value
Outstanding at January 1, 2011		3,774,557		$	0.62		6.29	$	868,148
Granted		647,000		$	0.82		9.80		—
Exercised		—			—		—		—
Forfeited/Expired		(210,000	)	$	0.77		—		—
Outstanding at June 30, 2011		4,211,557		$	0.64		6.34	$	968,658
Exercisable at June 30, 2011		3,243,034		$	0.59		2.80	$	908,049

We use the Black-Scholes-Merton option valuation model to determine the fair value of stock-based compensation. The Black-Scholes-Merton model incorporates various assumptions including the expected term of awards, volatility of stock price, risk-free rates of return and dividend yield. The expected term of an award is generally no less than the option vesting period and is based on our historical experience. Expected volatility is based upon the historical volatility of our stock price. The risk-free interest rate is approximated using rates available on U.S. Treasury securities with a remaining term equal to the option’s expected life. We use a dividend yield of zero in the Black-Scholes-Merton option valuation model as we do not anticipate paying cash dividends in the foreseeable future.

As of June 30, 2011, we had $66,735 of unrecognized expenses related to non-vested stock-based compensation, which is expected to be recognized through 2014. The total fair value of options vested and the incremental expense for stock-based compensation during the three months ended June 30, 2011 and 2010 was $14,490 and $9,836, respectively. The total fair value of options vested and the incremental expense for stock-based compensation during the six months ended June 30, 2011 and 2010 was $28,298 and $18,795, respectively.

In calculating compensation related to stock option grants for the six and three months ended June 30, 2011, the fair value of each stock option is estimated on the date of grant using the Black-Scholes-Merton option-pricing model and the following weighted average assumptions: dividend yield none; expected volatility of 83%, risk-free interest rate of 3.19% and expected term of 10 years.

In connection with the 1^st installment of the AccelMed private placement, we also issued to the placement agent, an option to purchase 123,500 shares of our common stock at an exercise price of $0.01 per share. This option expires on June 23, 2012. We recorded the fair value of the options using the Black-Scholes-Merton option valuation model, as a reduction to our common stock and an increase in additional paid-in-capital in the amount of $47,045.

In connection with the 2^nd installment of the AccelMed private placement, we issued to the placement agent, an option to purchase 36,464 shares of our common stock at an exercise price of $0.01 per share. This option expires on May 26, 2013. We recorded the fair value of the options using the Black-Scholes-Merton option valuation model, as a reduction to our common stock and an increase in additional paid-in-capital in the amount of $18,491.

F-13

Ophthalmic Imaging Systems

Notes to Condensed Consolidated Financial Statements — (Continued)

Note 6.   Notes Payable

Notes payable at June 30, 2011 and December 31, 2010 consist of the following:

	June 30,		December 31,
	2011		2010
Convertible note	$	684,345	$	1,094,947
United Mizrahi Bank Loan		2,176,448		1,500,000
AccelMed Note		760,000
Intergamma Note		240,000
Other		219,336		224,675
Total		4,080,129		2,819,622
Less: current portion		2,454,443		1,518,099
Long-term portion	$	1,625,686	$	1,301,523

As of June 30, 2011, the Company’s long-term debt payment obligations for each of the next five years are:

	Long Term Debt
2012	$	864,274
2013		732,480
2014		372,591
2015		7,539
2016		—
	$	1,976,885

Convertible note

On October 29, 2007, we issued 6.5% convertible notes (the “Notes”), which are convertible into shares of our common stock and warrants (the “Warrants”), to The Tail Wind Fund Ltd. and Solomon Strategic Holdings, Inc. (together with The Tail Wind Fund Ltd., the “Holders”) to purchase an aggregate of 616,671 shares of our common stock at an exercise price of $1.87 per share. These warrants expire on December 10, 2012.

On June 24, 2009, we entered into an Extension Agreement (the “Extension Agreement”) by and between us and the Holders. Pursuant to the Extension Agreement, with respect to the Notes, the Holders agreed to extend the principal payments due thereon for 18 months, such that the first principal payment of $208,333 was due December 31, 2010. The extension called for principal payments of $229,167 to be due on April 30, 2011, June 30, 2011, August 30, 2011, and October 31, 2011, the maturity date of the Notes. As of June 30, 2011, $687,500 of principal is outstanding. As consideration for these extensions and waivers, we issued warrants (the “New Warrants”) to the Holders to purchase an aggregate of 500,000 shares of our common stock. These New Warrants have an exercise price of $1.00 per share and expire on June 24, 2012. Pursuant to certain anti-dilution provisions in the Notes and Warrants, which were triggered as a result of the sale of securities under the Purchase Agreement with AccelMed, the conversion and exercise prices changed from $1.64 to $1.06 per share for the Notes and $1.87 to $1.21 per share for the Warrants. Based on these changes, the Holders received an additional 371,157 and 333,686 shares of common stock under the Notes and Warrants, respectively. During the 1st quarter of 2010, the Holders converted an aggregate of $250,000 of the Convertible Notes principal balance into 219,780 shares of our common stock.

F-14

Ophthalmic Imaging Systems

Notes to Condensed Consolidated Financial Statements — (Continued)

The anti-dilution provisions present in the conversion option of the Note, Warrants, and New Warrants, which trigger if we issue or sell any equity securities or securities convertible into equity, options or rights to purchase equity securities at a per share selling price less than the exercise price, then the exercise price will be adjusted pursuant to a weighted-average formula. The fair value of the conversion option of the Note has been recorded in the balance sheet as a derivative financial liability. The fair value of the conversion option of the Note is determined based on a lattice valuation model and changes in the fair value of the conversion option is reported in earnings each reporting period. As of June 30, 2011, and December 31, 2010, the total value of the conversion option was $28,863 and $70,400, respectively. The fair value of the Warrants and New Warrants has been recorded in the balance sheet as derivative financial liabilities. The fair values of the Warrants and New Warrants are determined based on a lattice valuation model and changes in the fair value are reported in earnings each reporting period. As of June 30, 2011, and December 31, 2010, the total value of the Warrants and New Warrants was $349,045 and $363,606, respectively.

United Mizrahi Bank Loan

On October 23, 2009, we entered into a Secured Debenture (the “Secured Debenture”) with United Mizrahi Bank. Under the Secured Debenture we agreed to assume MediVision’s loan under the Debenture in an amount of up to $1,500,000 (the “Loan Amount”). We also agreed to secure the Loan Amount by granting United Mizrahi Bank a security interest in all or substantially all of our assets. Under the Secured Debenture, United Mizrahi Bank may require the immediate payment of the entire Loan Amount upon certain events, which include among other things, our failure to make a payment on a due date or a breach or failure to perform its obligations pursuant to the Secured Debenture. Upon failure to make a payment, we must pay, within seven days, the amount demanded by United Mizrahi Bank. The Loan amount accrues interest at a rate equal to LIBOR, plus 4.75%. We must maintain a cash balance of at least $400,000 at United Mizrahi Bank as long as the loan remains outstanding. As the balance of the deposit is not legally restricted or held as a compensating balance against borrowings, it is not reported as restricted cash on the balance sheet as of the current reporting period. We are also subject to a debt covenant, whereby our cash plus accounts receivable must be at least 150% of the principal and interest outstanding under the loan.

On October 23, 2009, in connection with the assumption of the United Mizrahi loan, we issued to United Mizrahi Bank a warrant (the “Warrant”) to purchase 350,000 shares of our common stock at an exercise price of $1.00 which will expire upon the earlier of October 23, 2012 or twelve months following the completion of (1) a primary public offering of our common stock (a “Public Offering”) or (2) (a) the sale of all or substantially all of our assets or (b) the merger or consolidation of the Company with or into another entity, pursuant to which 50% of the Company’s outstanding common stock is held by person(s) who prior to the transaction held, in aggregate, less than 5% (together, a “Liquidity Event,” and together with a Public Offering, an “Exit Event”); provided however, if the underwriter in a Public Offering or the purchasing person(s) in a Liquidity Event require that all our outstanding warrants and options, including the Warrant be exercised prior to or part of the Public Offering or Liquidity Event, as applicable, then the Warrant will terminate, subject to certain notice requirements, upon completion of such transaction.

The exercise price is, subject to the happening of certain events, including, but not limited to, the payment of a stock dividend or a stock split. The Warrant also includes certain anti-dilution provisions if we issue or sell any equity securities or securities convertible into equity, options or rights to purchase equity securities at a per share selling price less than the exercise price, then the exercise price will be adjusted pursuant to a weighted-average formula. Upon or immediately prior to an Exit Transaction, United Mizrahi may elect to waive all or any portion of the rights under the Warrant for $225,000 (the “Alternative Payment”). If only a portion of the Warrant is waived or if the Warrant was partially exercised prior to the Exit Event, the Alternative Payment will be reduced proportionately. We record the fair value of the Warrant, using a lattice valuation model, in the balance sheet as a derivative liability financial instrument. Changes in the fair value of

F-15

Ophthalmic Imaging Systems

Notes to Condensed Consolidated Financial Statements — (Continued)

the Warrant are reported in earnings each reporting period. As of June 30, 2011, and December 31, 2010, the fair value of the warrants was $94,955 and $95,130, respectively.

On March 3, 2011, the Company, entered into a Refinance Agreement (the “Refinance Agreement”) by and between the Company and United Mizrahi Bank. Pursuant to the terms of the Refinance Agreement, United Mizrahi Bank agreed to increase the Loan Amount from $1,500,000 to $2,250,000 and defer principal payments due thereon for 6 months, such that the first principal payment of $62,500 is due on July 1, 2011. Thereafter principal payments of $62,500 will be due each month until maturity of the debt in June 2014. In consideration for the refinance of the note, the Company issued warrants to Mizrahi Tefahot Bank Ltd. to purchase an aggregate of 215,000 shares of the Company’s common stock (the “Refinance Warrants”). The Refinance Warrants have an exercise price of $1.00 per share and expire on March 3, 2014. Upon exercise of the Refinance Warrants, the Company will deliver the shares via physical settlement at the election of the United Mizrahi Bank. We recorded the Refinance Warrants in the balance sheet as an equity instrument. The Refinance Warrants do not meet the definition of derivative instruments in accordance with ASC 815. The Warrants were measured at fair value on the date of the transaction, March 3, 2011, and recorded within Additional paid-in-capital, a component of Ophthalmic Imaging Systems’ stockholders’ equity. The $73,552 value ascribed to the Refinance Warrants was estimated on March 3, 2011 using a lattice valuation model with the following assumptions: risk-free interest rate of 1.18%; expected life 3 years, expected volatility 83% and an expected dividend yield of 0.0%. The Company treated the Refinance Agreement as a debt modification as the terms of the Refinance Agreement were not substantively different than the original agreement. In accordance with ASC 470, the Company recorded interest expense based on a new effective interest rate which was determined based on the carrying amount of the instrument.

Note 7.   The following are the methods and assumptions we used to estimate the fair value of our financial instruments:

Cash and cash equivalents

Due to their short term nature, carrying amount approximates fair value

Accounts receivable

Due to their short term nature, carrying amount approximates fair value

Trade accounts payable

Due to their short term nature, carrying amount approximates fair value

Long-term debt

Due to the short term nature of the current portion of long-term debt, the carrying amount approximates fair value. The noncurrent portion of long-term debt approximates fair value because of the variable rate terms of these instruments.

Derivative Liability Financial Instruments

Our financial instruments are accounted for at fair value on a recurring basis. Fair value is defined as the price that would be received to sell an asset or price paid to transfer a liability in an orderly transaction between market participants at the measurement date. A market or observable input is the preferred source of values, followed by assumptions based on hypothetical transactions in the absence of market inputs.

F-16

Ophthalmic Imaging Systems

Notes to Condensed Consolidated Financial Statements — (Continued)

The standard characterizes inputs used in determining fair value according to a hierarchy that prioritizes those inputs based upon the degree to which they are observable. The three levels of the fair-value-measurement hierarchy are as follows:

•  Level 1 — inputs represent quoted prices in active markets for identical assets or liabilities (for example exchange-traded commodity derivatives).

•  Level 2 — inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (for example, quoted market prices for similar assets or liabilities in active markets or quoted market prices for identical assets or liabilities in markets not considered to be active, inputs other than quoted prices that are observable for the asset or liability, or market-corroborated inputs).

•  Level 3 — inputs that are not observable from objective sources, such as the Company’s internally developed assumptions used in pricing an asset or liability (for example, an estimate of future cash flows used in a company’s internally developed present value of future cash flows model that underlies the fair-value measurement).

In determining fair value, we utilize observable market data when available, or models that incorporate observable market data. In addition to market information, we incorporate transaction-specific details that, in management’s judgment, market participants would take into account when measuring fair value.

In arriving at fair-value estimates, we utilize the most observable inputs available for the valuation technique employed. If a fair-value measurement reflects inputs at multiple levels within the hierarchy, the fair-value measurement characterized based upon the lowest level of input that is significant to the fair-value measurement. For us, recurring fair-value measurements are performed for warrant liabilities and embedded conversion option liabilities related to notes payable.

All derivative liability financial instruments are recognized in the balance sheet at their fair value. Changes in the fair values of derivative liability financial instruments are reported in earnings. We do not hold any derivative liability financial instruments that reduce risk associated with hedging exposure and we have not designated any of our derivative liability financial instruments as hedge instruments.

The Company has no items valued using Level 1 and Level 2 inputs. The following table sets forth the fair value hierarchy of the Company’s financial liabilities that were accounted for at fair value on a recurring basis as of June 30, 2011 and December 31, 2010. No asset financial instruments were recorded at fair value on a recurring basis at June 30, 2011 and December 31, 2010.

F-17

Ophthalmic Imaging Systems

Notes to Condensed Consolidated Financial Statements — (Continued)

The following table summarizes the valuation of our financial liabilities by the fair value hierarchy at June 30, 2011 and December 31, 2010:

	June 30, 2011
	Total		Level 1		Level 2		Level 3
Liabilities at Fair Value:
Loan conversion option
The Tail Wind Fund Ltd. and Solomon Strategic Holdings, Inc.	$	28,863		—		—	$	28,863
Warrants
The Tail Wind Fund Ltd. and Solomon Strategic Holdings, Inc.		349,045		—		—		349,045
United Mizrahi Bank		94,955		—		—		94,955
AccelMed		1,016,621		—		—		1,016,621
Total	$	1,489,484		—		—	$	1,489,484

	December 31, 2010
	Total		Level 1		Level 2		Level 3
Liabilities at Fair Value:
Loan conversion option
The Tail Wind Fund Ltd. and Solomon Strategic Holdings, Inc.	$	70,400		—		—	$	70,400
Warrants
The Tail Wind Fund Ltd. and Solomon Strategic Holdings, Inc.		363,606		—		—		363,606
United Mizrahi Bank		95,130		—		—		95,130
AccelMed		1,169,280		—		—		1,169,280
Total	$	1,698,416		—		—	$	1,698,416

The Company utilizes inputs that are not observable from objective sources, such as the Company’s internally developed assumptions. The Company uses market data or assumptions that market participants would use in pricing its instruments. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy. The Company uses an income approach to value its convertible debt and warrant derivative liability financial instruments. These instruments are valued using a lattice valuation model using market information as of the reporting date such as prevailing interest rates, the Company’s stock price volatility, and expected term.

The embedded conversion option listed above was issued in connection with a convertible note issued to The Tail Wind Fund Ltd. and Solomon Strategic Holdings, Inc. (together with The Tail Wind Fund Ltd., the “Holders”). The warrants listed above issued to the Holders were issued on October 27, 2007 and June 24, 2009 (See Note 6). The warrants issued to United Mizrahi Bank listed above were issued on October 26, 2009 (See Note 6). The warrants issued to U.M. AccelMed, Limited Partnership, an Israeli limited partnership (“AccelMed”) listed above were issued to on June 24, 2009 and May 26, 2010 (See Note 4).

F-18

Ophthalmic Imaging Systems

Notes to Condensed Consolidated Financial Statements — (Continued)

The following table summarizes current derivative liability financial instruments.

	June 30, 2011
	Cost		Fair Value		Carrying Value
Current Liabilities at fair value:
Loan conversion option
The Tail Wind Fund Ltd. and Solomon Strategic Holdings, Inc.	$	34,631	$	28,863	$	28,863
Warrants
The Tail Wind Fund Ltd. and Solomon Strategic Holdings, Inc.		83,929		349,045		349,045
United Mizrahi Bank		40,139		94,955		94,955
AccelMed		813,471		1,016,621		1,016,621
Total current	$	972,170	$	1,489,484	$	1,489,484

	December 31, 2010
	Cost		Fair Value		Carrying Value
Current Liabilities at fair value:
Loan conversion option
The Tail Wind Fund Ltd. and Solomon Strategic Holdings, Inc.	$	34,631	$	70,400	$	70,400
Warrants
The Tail Wind Fund Ltd. and Solomon Strategic Holdings, Inc.		83,929		363,606		363,606
United Mizrahi Bank		40,139		95,130		95,130
AccelMed		813,471		1,169,280		1,169,280
Total current	$	972,170	$	1,698,416	$	1,698,416

The activity relating to derivative liability financial instruments valued on a recurring basis utilizing Level 3 inputs for the three and six months ended June 30, 2011 is summarized below:

	Conversion Option			Conversion Option
	Three Months Ended			Six Months Ended
	June 30, 2011			June 30, 2011
	The Tail Wind Fund Ltd.			The Tail Wind Fund Ltd.
	and Solomon Strategic			and Solomon Strategic
	Holdings, Inc.			Holdings, Inc.
Beginning Balance	$	39,478		$	70,400
Conversion		—			—
Other adjustments		—			—
Valuation Adjustment		(10,615	)		(41,537	)
Purchases, sales, issuances, and settlements		—			—
Transfers into and (or) out of Level 3		—			—
Ending Balance	$	28,863		$	28,863

F-19

Ophthalmic Imaging Systems

Notes to Condensed Consolidated Financial Statements — (Continued)

	Warrants
	Three Months Ended June 30, 2011
	The Tail Wind Fund
	Ltd. and Solomon						United Mizrahi
	Strategic Holdings			AccelMed			Bank
Beginning Balance	$	316,044		$	928,085		$	85,575
Conversion		—			—			—
Other adjustments		—			—			—
Valuation Adjustment		(33,001	)		(88,536	)		(9,380	)
Purchases, sales, issuances, and settlements		—			—			—
Transfers into and (or) out of Level 3		—			—			—
Ending Balance	$	349,045		$	1,016,621		$	94,955

Note 8.

	Warrants
	Six Months Ended June 30, 2011
	The Tail Wind Fund
	Ltd. and Solomon						United Mizrahi
	Strategic Holdings			AccelMed			Bank
Beginning Balance	$	363,606		$	1,169,280		$	95,130
Conversion		—			—			—
Other adjustments		—			—			—
Valuation Adjustment		(14,561	)		(152,659	)		(175	)
Purchases, sales, issuances, and settlements		—			—			—
Transfers into and (or) out of Level 3		—			—			—
Ending Balance	$	349,045		$	1,016,621		$	94,955

We recorded a gain of $141,532 and a gain of $664,729 as a result of the changes in fair value of derivative liability financial instruments during the three months ended June 30, 2011 and 2010, respectively.

We recorded a gain of $208,932 and a (loss) of $(103,876) as a result of the changes in fair value of derivative liability financial instruments during the six months ended June 30, 2011 and 2010, respectively.

There were no purchases, sales, issuances, or settlements of Level 3 financial instruments. Additionally, there were no transfers of financial instruments into or out of Level 3.

Warranty Obligations

We generally offer a one-year warranty to our customers. Our warranty requires us to repair or replace defective products during the warranty period. At the time product revenue is recognized, we record a liability for estimated costs that may be incurred under our warranties. The costs are estimated based on historical experience and any specific warranty issues that have been identified. The amount of warranty liability accrued reflects our best estimate of the expected future cost of honoring our obligations under the warranty plans. We periodically assess the adequacy of our recorded warranty liability and adjust the balance as necessary.

F-20

Ophthalmic Imaging Systems

Notes to Condensed Consolidated Financial Statements — (Continued)

The following provides a reconciliation of changes in our warranty reserve:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
Warranty balance at beginning of period	$	183,138		$	132,950		$	172,725		$	90,000
Reductions for warranty services provided		(28,125	)		(29,850	)		(35,425	)		(39,200	)
Changes for accruals in current period		83,515			82,000			142,422			156,800
Changes in the accrual for warranties existing at the beginning of the current period		(41,194	)		22,500			(82,388	)		(45,000	)
Warranty balance at end of period	$	197,334		$	162,600		$	197,334		$	162,600

Note 9.   Segment Reporting

Our business consists of two operating segments: OIS and Abraxas, our wholly-owned subsidiary. Our management reviews Abraxas’ results of operations separately from that of OIS. Our operating results for Abraxas exclude income taxes. The provision for income taxes is calculated on a consolidated basis, and accordingly, is not presented by segment. It is excluded from the measure of segment profitability as reviewed by our management. CCS does not meet the materiality requirements for segment reporting and accordingly, CCS’ financial information is reported as “Other” in the table within this note below.

We evaluate our reporting segments in accordance with FASB Accounting Standards Codification Topic 280, Segment Reporting (“Topic 280”). Our Chief Financial Officer (“CFO”) has been determined to be the Chief Operating Decision Maker as defined by Topic 280. The CFO allocates resources to Abraxas based on its business prospects, competitive factors, net sales and operating results.

All significant intercompany balances and transactions have been eliminated in consolidation.

F-21

Ophthalmic Imaging Systems

Notes to Condensed Consolidated Financial Statements — (Continued)

The following presents our financial information by segment for the three and six months ended June 30, 2011 and 2010:

	Three Months Ended						Six Months Ended
	June 30,			June 30,			June 30,			June 30,
Statement of Income:	2011			2010			2011			2010
Net sales:
OIS	$	3,368,458		$	3,680,200		$	6,298,245		$	6,895,925
Abraxas		821,397			827,996			1,181,437			1,594,561
Other		220,692			251,932			394,805			402,957
Total	$	4,410,547		$	4,760,128		$	7,874,487		$	8,893,443
Gross profit:
OIS	$	1,724,336		$	2,398,516		$	3,260,807		$	4,311,130
Abraxas		382,963			340,563			147,646			611,205
Other		65,298			107,101			156,239			190,407
Total	$	2,172,598		$	2,846,180		$	3,564,694		$	5,112,742
Operating Loss:
OIS	$	(736,411	)	$	62,123		$	(1,387,251	)	$	(100,037	)
Abraxas		(647,574	)		(443,952	)		(1,774,047	)		(901,294	)
Other		(67,456	)		4,052			(83,164	)		(15,555	)
Total	$	(1,451,441	)	$	(377,777	)	$	(3,244,462	)	$	(1,016,886	)
Net loss (consolidated):	$	(1,658,972	)	$	177,584		$	(3,210,922	)	$	(1,328,630	)

F-22

EX-99.7

EXHIBIT 99.7

MERGE HEALTHCARE SOLUTIONS INC.

CONSOLIDATED FINANCIAL STATEMENTS AND NOTES

AS OF DECEMBER 31, 2010 AND 2009, AND FOR THE PERIODS ENDED DECEMBER 31, 2010 AND APRIL 27, 2010, AND FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008

INDEX

	Page
PART I — FINANCIAL INFORMATION
Report of Independent Public Accounting Firm — BDO USA, LLP — Milwaukee, WI	F-2
Report of Independent Public Accounting Firm — BDO USA, LLP — Boston, MA	F-3
Condensed Consolidated Financial Statements	F-4
Condensed Consolidated Balance Sheets (Unaudited)	F-4
Condensed Consolidated Statements of Operations (Unaudited)	F-5
Condensed Consolidated Statement of Shareholders’ Equity and Comprehensive Loss (Unaudited)	F-6
Condensed Consolidated Statements of Cash Flows (Unaudited)	F-7
Notes to Condensed Consolidated Financial Statements (Unaudited)	F-8

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Merge Healthcare Solutions Inc.

Hartland, Wisconsin

We have audited the accompanying consolidated balance sheet of Merge Healthcare Solutions Inc., formerly known as AMICAS, Inc. (Successor Company), as of December 31, 2010 and the related consolidated statements of operations, stockholders’ equity and comprehensive loss, and cash flows for the period April 28, 2010 through December 31, 2010. We have also audited the consolidated statements of operations, stockholders’ equity and comprehensive loss and cash flows of Merge Healthcare Solutions Inc., formerly known as AMICAS, Inc. (Predecessor Company), for the period January 1, 2010 through April 27, 2010. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Merge Healthcare Solutions Inc. (Successor Company), at December 31, 2010, and the results of its operations and its cash flows for the period April 28, 2010 through December 31, 2010 and the results of operations and cash flows of Merge Healthcare Solutions, Inc. (Predecessor Company), for the period January 1, 2010 through April 27, 2010, in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note B, the accompanying financial statements of the Successor Company have been adjusted to reflect the combination between entities under common control that occurred subsequent to December 31, 2010.

/s/  BDO USA, LLP

Milwaukee, Wisconsin

March 15, 2011, except for Note B

which is as of September 1, 2011

F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

AMICAS, Inc.

Boston, Massachusetts

We have audited the accompanying consolidated balance sheet of AMICAS, Inc. and its subsidiaries as of December 31, 2009 and the related consolidated statements of operations, stockholders’ equity and comprehensive loss, and cash flows for each of the two years in the period ended December 31, 2009. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of AMICAS, Inc. and its subsidiaries at December 31, 2009, and the results of their operations and their cash flows for each of the two years in the period ended December 31, 2009, in conformity with accounting principles generally accepted in the United States of America.

As described in Note F of the financial statements, the Company adopted the accounting standards related to Business Combinations, effective for business combinations entered into after January 1, 2009.

/s/  BDO USA, LLP (formerly known as BDO Seidman, LLP)

Boston, Massachusetts

March 11, 2010

F-3

MERGE HEALTHCARE SOLUTIONS INC.

CONSOLIDATED BALANCE SHEETS

	(Successor			(Predecessor
	Company)			Company)
	December 31,			December 31,
	2010			2009
	(As adjusted,
	see Note B)
	(In thousands, except for share data)
ASSETS
Current assets:
Cash and cash equivalents, including restricted cash of $963 and zero at December 31, 2010 and 2009, respectively	$	27,838		$	8,785
Marketable securities		—			38,888
Accounts receivable, net of allowance for doubtful accounts of $1,011 and $335 at December 31, 2010 and 2009, respectively		41,809			21,594
Inventory		2,555			1,960
Prepaid expenses and other current assets		9,763			5,762
Total current assets		81,965			76,989
Property and equipment, net of accumulated depreciation of $2,433 and $7,592 at December 31, 2010 and 2009, respectively		3,414			8,118
Purchased and developed software, net of accumulated amortization of $2,966 and $13,017 at December 31, 2010 and 2009, respectively		20,636			7,985
Other intangibles, net of accumulated amortization of $4,774 and $1,192 at December 31, 2010 and 2009, respectively		43,916			5,708
Goodwill		152,334			1,213
Other assets		12,622			2,246
Total assets	$	314,887		$	102,259
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	18,905		$	9,299
Accrued employee compensation and benefits		3,171			3,452
Intercompany payables		5,147			—
Interest payable, current portion		3,917			—
Leases payable, current portion		639			10
Deferred revenue, current portion		41,712			32,289
Total current liabilities		73,491			45,050
Notes payable, long-term		195,077			—
Deferred revenue and other long term liabilities		5,849			1,754
Total liabilities		274,417			46,804
Shareholders’ equity:
Common stock, $0.001 par value: 1,000 and 200,000,000 shares authorized and 100 and 52,794,106 shares issued and outstanding at December 31, 2010 and 2009, respectively		—			52
Additional paid-in capital		111,565			235,340
Accumulated deficit		(71,095	)		(132,559	)
Accumulated other comprehensive income (loss)		—			(25	)
Treasury stock, at cost, zero and 16,357,854 shares at December 31, 2010 and 2009, respectively		—			(47,353	)
Total shareholders’ equity		40,470			55,455
Total liabilities and shareholders’ equity	$	314,887		$	102,259

The accompanying notes are an integral part of the consolidated financial statements.

F-4

MERGE HEALTHCARE SOLUTIONS INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

	Periods Ending
	(Successor			(Predecessor			Years Ended December 31,
	Company)			Company)			(Predecessor			(Predecessor
	December 31,			April 27,			Company)			Company)
	2010			2010			2009			2008
	(As adjusted,
	see Note B)
	(In thousands, except for per share data)
Net sales:
Software licenses and system sales	$	20,983		$	7,525		$	17,120		$	10,467
Maintenance and services		64,645			29,191			72,022			39,886
Total net sales		85,628			36,716			89,142			50,353
Cost of sales:
Software licenses and system sales		13,863			3,411			11,467			4,786
Maintenance and services		25,645			12,753			31,469			17,819
Depreciation, amortization and impairment		7,115			1,403			3,157			2,291
Total cost of sales		46,623			17,567			46,093			24,896
Gross margin		39,005			19,149			43,049			25,457
Operating costs and expenses:
Selling, general and administrative		22,708			15,798			25,056			20,408
Research and development		9,468			6,486			14,562			8,631
Acquisition costs		36			8,439			3,028			—
Depreciation and amortization		4,514			787			2,859			997
Restructuring, severance and impairment charges		4,565			—			3,824			27,490
Total operating costs and expenses		41,291			31,510			49,329			57,526
Operating loss		(2,286	)		(12,361	)		(6,280	)		(32,069	)
Other income (expense):
Interest expense		(17,211	)		(8	)		(37	)		—
Interest income		31			13			769			2,187
Loss on sale of investments		—			—			(9	)		(31	)
Other, net		(38	)		(28	)		(23	)		—
Total other income (expense)		(17,218	)		(23	)		700			2,156
Loss before income taxes		(19,504	)		(12,384	)		(5,580	)		(29,913	)
Income tax expense (benefit)		591			46			(1,570	)		158
Net loss	$	(20,095	)	$	(12,430	)	$	(4,010	)	$	(30,071	)
Net income (loss) per share — basic		NM	(1)		(0.34	)		(0.11	)	$	(0.77	)
Weighted average number of common shares outstanding — basic		NM	(1)		37,010			35,489			38,842
Net income (loss) per share — diluted		NM	(1)	$	(0.34	)	$	(0.11	)	$	(0.77	)
Weighted average number of common shares outstanding — diluted		NM	(1)		37,010			35,489			38,842

(1) Amount is not meaningful as a result of the acquisition by Merge Healthcare Incorporated

The accompanying notes are an integral part of the consolidated financial statements.

F-5

MERGE HEALTHCARE SOLUTIONS INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY AND COMPREHENSIVE LOSS

	Common Stock											Accumulated
						Additional						Other			Treasury						Total
	Shares			Issued		Paid-In			Accumulated			Comprehensive			Stock			Treasury			Shareholders’			Comprehensive
	Issued			Amount		Capital			Deficit			Income			Shares			Stock			Equity			Loss
	(In thousands except for share data)
(Predecessor Company)
Balance at December 31, 2007		51,296,823		$	51	$	229,056		$	(98,478	)	$	60		$	(6,824,192	)	$	(22,443	)		108,246
Issuance of restricted stock		31,800			—		89			—			—			—			—			89
Exercise of stock options		145,342			—		325			—			—			—			—			325
Share-based compensation expense		—			—		1,435			—			—			—			—			1,435
Repurchase of treasury stock		—			—		—			—			—			(9,445,896	)		(24,769	)		(24,769	)
Unrealized gain on marketable securities		—			—		—			—			40			—			—			40		$	40
Net loss		—			—		—			(30,071	)		—			—			—			(30,071	)		(30,071	)
Balance at December 31, 2008		51,473,965			51		230,905			(128,549	)		100			(16,270,088	)		(47,212	)		55,295		$	(30,031	)
Issuance of restricted stock		60,690			—		118			—			—			—			—			118
Exercise of stock options and issuance of shares under the Employee Stock Purchase Plan		1,259,451			1		2,397			—			—			—			—			2,398
Share-based compensation expense		—			—		1,920			—			—			—			—			1,920
Repurchase of treasury stock		—			—		—			—			—			(87,766	)		(141	)		(141	)
Unrealized loss on marketable securities		—			—		—			—			(131	)		—			—			(131	)		(131	)
Foreign currency translation adjustment		—			—		—			—			6			—			—			6			6
Net loss		—			—		—			(4,010	)		—			—			—			(4,010	)		(4,010	)
Balance at December 31, 2009		52,794,106			52		235,340			(132,559	)		(25	)		(16,357,854	)		(47,353	)		55,455		$	(4,135	)
Stock issued under ESPP		75,899			—		189			—			—			—			—			189
Exercise of stock options		590,084			1		1,331			—			—			—			—			1,332
Share-based compensation expense		—					1,423			—			—			—			—			1,423
Payments made to stock option and restricted stock holders		(92,245	)		—		(22,906	)		—			—			—			—			(22,906	)
Net loss		—			—		—			(12,430	)		—			—			—			(12,430	)		(12,430	)
Other comprehensive income		—			—		—			—			31			—			—			31			31
Balance at April 27, 2010		53,367,844		$	53	$	215,377		$	(144,989	)	$	6			(16,357,854	)	$	(47,353	)	$	23,094		$	(12,399	)
(Successor Company, as adjusted, see Note B)
Entities merged at April 28, 2010		—		$	—	$	71,202		$	(51,000	)	$	—			—		$	—		$	20,202
Investment by Merge		100			—		39,743			—			—			—			—			39,743
Share-based compensation expense		—			—		620			—			—			—			—			620
Net loss		—			—		—			(20,095	)		—			—			—			(20,095	)		(20,095	)
Balance at December 31, 2010		100		$	—	$	111,565		$	(71,095	)	$	—			—		$	—		$	40,470		$	(20,095	)

The accompanying notes are an integral part of the consolidated financial statements.

F-6

MERGE HEALTHCARE SOLUTIONS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Periods Ended
	(Successor			Predecessor			Years Ended December 31,
	Company)			Company)			Predecessor			Predecessor
	December 31,			April 27,			Company)			Company)
	2010			2010			2009			2008
	(As adjusted,
	see Note B)
	(In thousands)
Cash flows from operating activities:
Net loss	$	(20,095	)	$	(12,430	)	$	(4,010	)	$	(30,071	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation, amortization and impairment		11,629			2,178			6,022			3,465
Provision for bad debts		439			2,032			319			115
Loss on disposal of property and equipment		—			—			923			6
Impairment of goodwill		—			—			—			27,313
Non-cash stock based payments		620			1,423			2,038			1,524
Amortization of notes payable issuance costs and discount		1,445			—			—			—
Change in contingent consideration for acquisitions		(52	)		—			—			—
Changes in operating assets and liabilities, net of effects of acquisitions, mergers and dispositions:
Accounts receivable		(13,226	)		(320	)		180			145
Prepaid expenses, other current assets and intercompany balances		(2,791	)		(453	)		1,919			330
Accounts payable and accrued expenses		7,659			(1,425	)		(3,343	)		(2,777	)
Deferred revenue		15,466			(2,029	)		9,315			4,282
Unrecognized tax benefits		406			—			(1,379	)		103
Net cash provided by (used in) operating activities		1,500			(11,024	)		11,984			4,435
Cash flows from investing activities:
Cash paid for acquisitions, net of cash acquired		(3,191	)		—			(20,698	)		—
Purchases of property, equipment, and leasehold improvements		(434	)		(144	)		(729	)		(645	)
Sale of facility		6,124			—			—			—
Change in restricted cash, net of effects of mergers		(800	)		—			—			—
Purchases of held-to-maturity securities		—			—			(60,534	)		(236,147	)
Maturities of held-to-maturity securities		—			7,964			126,833			237,739
Purchases of available-for-sale securities		—			—			(106,335	)		(37,033	)
Sales of available-for-sale securities		—			30,924			48,641			54,925
Net cash provided by (used in) investing activities		1,699			38,744			(12,822	)		18,839
Cash flows from financing activities:
Principal payments on capital leases		(92	)		—			—			—
Exercise of stock options and ESPP		—			1,526			2,398			325
Repurchase of Common Stock		—			(22,906	)		(141	)		(24,769	)
Proceeds from issuance of notes, net of discount		194,532			—			—			—
Note issuance costs		(9,015	)		—			—			—
Capital contribution by Merge		39,743			—			—			—
Payments to acquire outstanding shares		(223,910	)		—			—			—
Net cash provided by (used in) financing activities		1,258			(21,380	)		2,257			(24,444	)
Net increase (decrease) in cash and cash equivalents		4,457			6,340			1,419			(1,170	)
Cash and cash equivalents, beginning of period		22,418			8,785			7,366			8,536
Cash and cash equivalents, end of period(1)	$	26,875		$	15,125		$	8,785		$	7,366

(1) Cash net of restricted cash of $963 as of December 31, 2010

The accompanying notes are an integral part of the consolidated financial statements.

F-7

MERGE HEALTHCARE SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A.   Nature of Operations

Effective January 1, 2011, AMICAS, Inc. (AMICAS) was renamed Merge Healthcare Solutions Inc. (MHSI). MHSI (or the Company) is an enterprise image provider dedicated to healthcare information technology (IT) solutions. The Company develops software solutions that automate healthcare data and diagnostic workflow to create a more comprehensive electronic record of the patient experience. The company’s solutions are designed to help solve some of the toughest challenges in health information exchange today, such as the incorporation of medical images and diagnostic information into broader healthcare IT applications, the interoperability of proprietary software solutions, advanced clinical tools like computer aided detection (CAD), the profitability of outpatient imaging practices in the face of declining reimbursement and the ability to improve the efficiency and cost effectiveness of the Company’s customers’ businesses.

On April 28, 2010, Merge Healthcare Incorporated (Merge) completed the acquisition of AMICAS through a successful tender offer for the 37,009,990 outstanding shares of common stock of AMICAS at $6.05 per share in cash. Following the tender offer, Merge purchased the remaining shares pursuant to a merger of a subsidiary of Merge with and into AMICAS. Total transaction consideration was approximately $223.9 million. In addition, prior to the completion of the acquisition, AMICAS paid cash to holders of vested, in-the-money stock options for the difference between $6.05 per share and the exercise price of such options. The holders of shares of restricted stock were paid $6.05 per share in cash. The total consideration paid to option and restricted stockholders was approximately $22.9 million. Merge financed the transaction with $200 million aggregate principal amount of 11.75% Senior Secured Notes due 2015 (Notes), proceeds of $41.8 million from the issuance of preferred and common stock and cash already available at the two companies. MHSI is considered a domestic restricted subsidiary per the Notes and constitutes a substantial portion of the collateral. As a result, Merge is required to file separate financial statements for MHSI.

B.   Change in Reporting Entity

The accompanying consolidated financial statements of MHSI (Successor Company) have been adjusted to reflect the combination between entities under common control that occurred subsequent to December 31, 2010. Effective January 1, 2011, Merge eMed, Inc., Merge CAD, Inc. and Cedara Software (USA) Limited were merged into MHSI. The balances as of April 28, 2010 represent the carrying amounts of the transferring entity (Merge Healthcare Incorporated) for the entities merged into MHSI. The effects of the merger were to increase the net loss of the Successor Company for the period ended December 31, 2010 from $14,799 to $20,095 and to increase total assets of the Successor Company as of December 31, 2010 from $274,222 to $314,887.

C.   Segment Reporting

Operating segments are defined as components of an enterprise where separate financial information is available that is evaluated regularly by the chief operating decision maker, the Company’s chief executive officer, in deciding how to allocate resources and in assessing performance. The Company has identified one reportable industry segment: the development and marketing of the Company’s products and services to healthcare provider organizations including acute care facilities, Integrated Delivery Networks (IDN’s) and ambulatory centers. The Company generates substantially all of its revenues from the licensing of the Company’s software products and related professional services and maintenance services (which include Electronic Data Interchange, or EDI, sales). The Company’s revenues are earned and expenses are incurred principally in the United States market.

F-8

MERGE HEALTHCARE SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

D.   Summary of Significant Accounting Policies

Principles of Consolidation

As a result of the acquisition by Merge on April 28, 2010, the year ended December 31, 2010 has been divided into two periods. The first period represents the pre-acquisition period (January 1, 2010 through April 27, 2010), while the second period represents the post-acquisition period (April 28, 2010 through December 31, 2010). Where applicable, the financial statements and related footnote disclosures throughout this document will refer to these periods as the periods ended April 27, 2010 and December 31, 2010.

The consolidated financial statements for the pre-acquisition period and years include only the accounts of AMICAS and subsidiary (now known as MHSI Predecessor Company). All significant intercompany accounts and transactions have been eliminated in consolidation. The consolidated financial statements for the period subsequent to the acquisition date include the accounts of all entities merged into MHSI, adjusted to eliminate any intercompany accounts and transactions.

Certain transactions which were directly related to the acquisition by Merge have been pushed down to the MHSI financial statements. The consolidated balance sheet of MHSI as of December 31, 2010 includes the Notes issued by Merge and the related discount and debt issuance costs. Also, stockholders’ equity within the consolidated balance sheet includes the investment by Merge which was used as partial consideration to complete the acquisition as indicated in the following table (in thousands):

Notes, net of discount	$	194,532
Debt issuance costs		(9,015	)
Investment by Merge		38,393
Total acquisition consideration	$	223,910

The investment by Merge is included as additional paid in capital on the consolidated balance sheet as of December 31, 2010.

The consolidated statement of operations for the period ended December 31, 2010 includes:

•  Interest expense on the Notes, as well as the applicable amortization of discount and debt issuance costs;

•  Share-based compensation expense for Merge stock options issued to MHSI employees;

•  Income tax expense calculated as if MHSI were to file income tax returns as a stand-alone company; and

•  Corporate administration costs of Merge (excluding public company stewardship costs), which are allocated to MHSI based on revenues. The Company believes this allocation reasonably reflects the usage of resources of MHSI.

Reclassifications

Where appropriate, certain reclassifications have been made to the prior periods’ consolidated financial statements to conform to the current year presentation. Specifically, depreciation expense in the years ended

F-9

MERGE HEALTHCARE SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

December 31, 2009 and 2008 was reclassified within cost of sales and operating costs and expenses as indicated in the following table (in thousands):

	Years Ended December 31,
	(Predecessor Company)
	2009			2008
Cost of sales:
Software licenses and system sales	$	(37	)	$	(10	)
Maintenance and services		(299	)		(77	)
Depreciation, amortization and impairment		336			87
Total cost of sales	$	—		$	—
Operating costs and expenses:
Selling, general and administrative	$	(1,774	)	$	(457	)
Research and development		(537	)		(138	)
Depreciation and amortization		2,311			595
Total operating costs and expenses	$	—		$	—

Use of Estimates

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and revenue and expenses during the period reported. These estimates include assessing the collectability of accounts receivable, the realization of deferred tax assets, tax contingencies and valuation allowances, restructuring reserves, useful lives for depreciation and amortization periods of tangible and intangible assets, long-lived asset impairments, expected stock price volatility and weighted average expected life and forfeiture assumptions for share-based payments, among others. The markets for the Company’s products are characterized by intense competition, rapid technological development, evolving standards, short product life cycles and price competition, all of which could impact the future realized value of the Company’s assets. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the period that they are determined to be necessary. Actual results could differ from those estimates.

Revenue Recognition

The Company recognizes revenue in accordance with FASB ASC 605 — Revenue Recognition (originally issued as Statement of Position (“SOP”) 97-2, “Software Revenue Recognition,” as amended by SOP 98-9, “Modification of SOP 97-2 with Respect to Certain Transactions,” SOP 81-1 “Accounting for Performance of Construction Type and Certain Performance Type Contracts”, the Securities and Exchange Commission’s Staff Accounting Bulletin 104, “Revenue Recognition in Financial Statements” and EITF 01-14, “Income Statement Characterization of Reimbursements for ’Out-of-Pocket’ Expenses Incurred”). Revenue from software licenses and system (computer hardware) sales are recognized upon execution of the sales contract and delivery of the software (off-the-shelf application software) and/or hardware unless the contract contains acceptance provisions. In all cases, however, the fee must be fixed or determinable, collection of any related receivable must be considered probable, and no significant post-contract obligations of the Company can be remaining. Otherwise, recognition of revenue from the sale is deferred until all of the requirements for revenue recognition have been

F-10

MERGE HEALTHCARE SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

satisfied. Maintenance fees for routine client support and unspecified product updates are recognized ratably over the term of the maintenance arrangement.

The Company reviews all contracts that contain non-standard payment terms. For these contracts, the Company reviews customer credit history to determine probability of collection and to determine whether or not the Company has a history of granting post contract concessions. When there is a history of successfully collecting payments from a customer without making post contract concessions, revenue is recognized upon delivery. In instances where there is not an established payment history and/or if the payment terms are in excess of twelve months revenue is recognized as payments become due and payable. License and service arrangements generally do not require significant customization or modification of software products to meet specific customer needs. In those limited instances that do require significant modification, including significant changes to software products’ source code or where there are acceptance criteria or milestone payments, recognition of software license revenue is deferred. In instances where it is determined that services are essential to the functionality of the software and there are no acceptance provisions, service revenues and software license and systems revenues are recognized using the percentage of completion method.

Most of the Company’s sales and licensing contracts involve multiple elements, in which case the total value of the customer arrangement is allocated to each element based on the vendor specific objective evidence, or VSOE, of the fair value of the respective elements. The residual method is used to determine revenue recognition with respect to a multiple-element arrangement when VSOE of fair value exists for all of the undelivered elements (e.g., implementation, training and maintenance services) but does not exist for one or more of the delivered elements of the contract (e.g., computer software or hardware). VSOE of fair value is determined based upon the price charged when the same element is sold separately. If VSOE of fair value cannot be established for the undelivered element(s) of an arrangement, the total value of the customer arrangement is deferred until the undelivered element(s) is delivered or until VSOE of its fair value is established. The Company accounts for certain third-party hardware/software and third-party hardware/software maintenance as separate units of accounting as the items to be purchased are “off-the-shelf” and can be sold separately on a standalone basis.

Contracts and arrangements with customers may include acceptance provisions, which would give the customer the right to accept or reject the product after it is shipped. If an acceptance provision is included, revenue is recognized upon the customer’s acceptance of the product, which occurs upon the earlier receipt of a written customer acceptance or expiration of the acceptance period. The timing of customer acceptances could materially affect the results of operations during a given period.

Revenue is recognized using contract accounting if payment of the software license fees is dependent upon the performance of consulting services or the consulting services are otherwise essential to the functionality of the licensed software. In these instances the Company allocates the contract value to services (maintenance and services revenues) based on list price, which is consistent with VSOE for such services, and the residual to product (software licenses and systems sales) in the Consolidated Statement of Operations. In instances where VSOE of fair value of services has not been established the software license revenue is deferred until the services are completed. Percentage-of-completion is determined by comparing the labor hours incurred to date to the estimated total labor hours required to complete the project. Labor hours are considered to be the most reliable, available measure of progress on these projects. Adjustments to estimates to complete are made in the periods in which facts resulting in a change become known. When the estimate indicates that a loss will be incurred, such loss is recorded in the period in which it is identified. When reliable estimates cannot be made, revenue is recognized upon completion. Significant judgments and estimates are involved in determining the percent complete of each contract. Different assumptions could yield materially different results. Delays in the implementation process could negatively affect operations in a given period by increasing volatility in revenue recognition.

F-11

MERGE HEALTHCARE SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Recognition of revenues in conformity with generally accepted accounting principles requires management to make judgments that affect the timing and amount of reported revenues.

Cash and Cash Equivalents

The Company considers all liquid investment instruments with original maturities of ninety days or less to be cash equivalents. Cash equivalents consist primarily of money market funds and are carried at fair value, which approximates cost.

Marketable Securities

Marketable securities consist of high quality debt instruments, primarily U.S. government, municipal and corporate obligations. Investments in corporate obligations are classified as held-to-maturity, as the Company has the intent and ability to hold them to maturity. Held-to-maturity marketable debt securities are reported at amortized cost. Investments in U.S. government and municipal obligations are classified as available-for-sale and are reported at fair value with unrealized gains and losses reported as other comprehensive income or loss.

Concentration of Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash, cash equivalents, marketable securities and accounts receivable. The Company places its cash and cash equivalents with financial institutions with high credit ratings. The Company invests in marketable securities and has policies to limit concentrations of investments.

The Company performs credit evaluations of its customers’ financial condition and does not require collateral, since management does not anticipate nonperformance of payment. The Company also maintains an allowance for doubtful accounts for potential credit losses and such losses have been within management’s expectations. For the periods ended December 31, 2010 and April 27, 2010, and the years ended December 31, 2009 and 2008, no customer represented greater than 10% of the Company’s revenues or net accounts receivable balance.

Accounts Receivable and Allowance for Doubtful Accounts

The Company’s accounts receivable are customer obligations due under normal trade terms carried at their face value, less provisions for bad debts. The Company evaluates the carrying amount of its accounts receivable on an ongoing basis and establishes a valuation allowance based on a number of factors, including specific customer circumstances, historical rate of write-offs and the past due status of the accounts. At the end of each reporting period, the allowance is reviewed and analyzed for adequacy and is often adjusted based on the findings. The allowance is increased through a reduction of revenues and/or an increase in the provision for bad debts. It is the Company’s policy to write off uncollectible receivables when management determines the receivable will become uncollectible.

F-12

MERGE HEALTHCARE SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table summarizes the allowance for doubtful accounts for the periods ended December 31, 2010 and April 27, 2010 and years ended December 31, 2009 and 2008:

	Periods Ended
							Years Ended December 31,
	(Successor			(Predecessor
	Company)			Company)			(Predecessor			(Predecessor
	December 31,			April 27,			Company)			Company)
	2010			2010			2009			2008
	(As adjusted,
	see Note B)
Balance at beginning of period	$	1,082		$	335		$	158		$	231
Additions charged to costs and expenses		439			2,032			319			115
Reductions(a)		(510	)		(2,367	)		(142	)		(188	)
Balance at end of period	$	1,011		$	—		$	335		$	158

(a) Write-offs, returns and discounts, net of recoveries.

Fair Value of Financial Instruments

Our other financial instruments include cash and cash equivalents, accounts receivable, marketable securities, accounts payable, deferred revenue, notes payable and certain accrued liabilities. The carrying amounts of these assets and liabilities approximate fair value due to the short maturity of these instruments and, in the case of the notes payable, due to the interest rate and terms approximating those available to us for similar obligations.

The Company uses a three-tier value hierarchy to prioritize the inputs used in measuring fair value of our financial assets and liabilities. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore, requiring an entity to develop its own assumptions.

The following table sets forth the Company’s cash and cash equivalents and marketable securities which are measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands).

							Balance at
	Fair Value Measurements Using						December 31,
	Level 1		Level 2		Level 3		2010
(Successor Company, as adjusted, see Note B)
Cash and cash equivalents	$	—	$	—	$	—	$	—
Total	$	—	$	—	$	—	$	—

							Balance at
	Fair Value Measurements Using						December 31,
	Level 1		Level 2		Level 3		2009
(Predecessor Company)
Cash and cash equivalents	$	8,785	$	—	$	—	$	8,785
Available for sale, marketable securities:								—
Commercial Paper		6,495		—		—		6,495
Federal agency obligations		6,375		—		—		6,375
State and municipal obligations		—		26,018		—		26,018
Total	$	21,655	$	26,018	$	—	$	47,673

F-13

MERGE HEALTHCARE SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table sets forth the changes in our Level 2 investments for the period indicated as follows (in thousands):

	2010
(Predecessor Company)
Balance at January 1	$	26,018
Sales of state and municipal obligations		(26,018	)
Balance at April 27	$	—
(Successor Company, as adjusted, see Note B)
Balance at December 31	$	—

Items Measured at Fair Value on a Nonrecurring Basis

Certain assets, including our goodwill, are measured at fair value on a nonrecurring basis. These assets are recognized at fair value when they are deemed to be impaired. The Company recorded an impairment charge of $2.3 million in the period ended December 31, 2010 to fully impair certain purchased software assets, as discussed in Note I.

Inventories

Inventories are stated at the lower of cost or market (net realizable value). The Company periodically reviews its quantities of inventories on hand and compares these amounts to expected usage of each particular product or product line. The Company records a charge to cost of revenue for the amount required to reduce the carrying value of inventories to estimated net realizable value. Costs of purchased third-party hardware and software associated with certain (primarily acquired) customer contracts are included as inventories in the Company’s consolidated balance sheets and charged to cost of system sales when the Company receives customer acceptance and all other relevant revenue recognition criteria are met. A summary of inventories is as follows:

	(Successor		(Predecessor
	Company)		Company)
	December 31,		December 31,
	2010		2009
	(As adjusted,
	see Note B)
Raw materials	$	948	$	581
Work-in-process		58		246
Completed systems		1,549		1,133
Total inventories	$	2,555	$	1,960

Long-lived Assets

In accordance with FASB ASC 360 — Property Plant and Equipment (which includes what was originally issued as SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”), the Company periodically reviews long-lived assets, other than goodwill, for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of those assets are no longer appropriate. Each impairment test is based on a comparison of the undiscounted cash flows to the recorded carrying value for the asset. If impairment is indicated, the asset is written down to its estimated fair value based on a discounted cash flow analysis. The Company has reviewed long-lived assets with estimable useful lives and determined that their carrying values as of December 31,

F-14

MERGE HEALTHCARE SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

2010 are recoverable in future periods. In the fourth quarter of 2008, the Company recorded a $0.2 million charge related to internal use purchased software that is no longer in use.

Goodwill

Goodwill represents the excess of cost over the fair value of net tangible and identifiable intangible assets of businesses acquired. The Company performs an assessment of impairment of goodwill and intangible assets with indefinite lives on an annual basis and whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. The Company would record an impairment charge if such an assessment were to indicate that, more likely than not, the fair value of such assets was less than the carrying value. Judgment is required in determining whether an event has occurred that may impair the value of goodwill or identifiable intangible assets. Factors that could indicate that impairment may exist include significant underperformance relative to plan or long-term projections, significant changes in business strategy, significant negative industry or economic trends or a significant decline in our stock price for a sustained period of time.

The first step (defined as “Step 1”) of the goodwill impairment test, used to identify potential impairment, compares the fair value of the equity with its carrying amount, including goodwill. If the fair value of the equity exceeds its carrying amount, goodwill of the reporting unit is considered not impaired, thus the second step of the impairment test is unnecessary. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test shall be performed to measure the amount of impairment loss, if any. The Company performed a Step 1 test at its annual testing date of October 1, 2010, and no impairment was identified.

There were certain triggering events that required the Company to perform an interim Step 1 test at December 31, 2008. These triggering events primarily include the duration of the decline of the Company’s stock price at a market value below the carrying value of equity from September 30, 2008 through December 31, 2008, and the continued deterioration of the credit markets and the economy in the fourth quarter which negatively impacts our customers access to capital to purchase the Company’s products and services.

At December 31, 2008, the Company completed an interim Step 1 test utilizing the market approach. The market approach considered the Company’s stock price to calculate the market capitalization of equity to compare to the carrying value of equity. The Company selected a 30 day moving average of the market value of equity to compare to the carrying value. Using the market approach, the carrying value of invested capital exceeded the market value by approximately 47%. The interim Step 1 test resulted in the determination that the carrying value of equity exceeded the fair value of equity, thus requiring the Company to measure the amount of any goodwill impairment by performing the second step of the impairment test.

An income approach was used to corroborate the interim Step 1 test. The discounted cash flow method is used to measure the fair value of our equity under the income approach. Determining the fair value using a discounted cash flow method requires the Company to make significant estimates and assumptions, including long-term projections of cash flows, market conditions and appropriate discount rates. The Company’s judgments are based upon historical experience, current market trends, pipeline for future sales, and other information. While the Company believes that the estimates and assumptions underlying the valuation methodology are reasonable, different estimates and assumptions could result in a different outcome. In estimating future cash flows, the Company relies on internally generated projections for a defined time period for sales and operating profits, including capital expenditures, changes in net working capital, and adjustments for non-cash items to arrive at the free cash flow available to invested capital. A terminal value utilizing a constant growth rate of cash flows was used to calculate a terminal value after the explicit projection period. The income approach supported the interim Step 1 test that resulted in the determination that the carrying value of equity exceeded the fair value of equity.

F-15

MERGE HEALTHCARE SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The second step (defined as “Step 2”) of the goodwill impairment test, used to measure the amount of impairment loss, compares the implied fair value of reporting unit goodwill with the carrying amount of that goodwill. The guidance in FASB ASC 350 — Intangibles — Goodwill and Other (which includes what was originally issued as SFAS 142, “Goodwill and Other Intangible Assets”) was used to estimate the implied fair value of goodwill. “If the carrying amount of the Company’s goodwill exceeds the implied fair value of that goodwill, an impairment loss shall be recognized in an amount equal to that excess. The loss recognized cannot exceed the carrying amount of goodwill. After a goodwill impairment loss is recognized, the adjusted carrying amount of goodwill shall be its new accounting basis.”

The implied fair value of goodwill was determined in the same manner as the amount of goodwill recognized in a business combination is determined. The excess of the fair value of the reporting unit over the amounts assigned to its assets and liabilities is the implied amount of goodwill. The Company identified several intangible assets that were valued during this process, including technology, customer relationships, trade names, non-compete agreements, and the Company’s workforce. The allocation process was performed only for purposes of testing goodwill for impairment. The Step 2 test resulted in the impairment of goodwill in an amount equal to its carrying value of $27.3 million.

In addition, the Company performed sensitivity analysis on certain key assumptions in the Step 2 test including the discount rate, customer retention rates and royalty rates. The net book value of the Company’s tangible net assets was approximately 91 percent of the fair value of equity. The Company’s tangible net assets were adjusted to reflect the fair value of deferred revenue. In addition, the total tangible and intangible net assets, excluding the assembled workforce, were $68.7 million or 122 percent of the fair value of equity. As a result, the assumptions included in the valuation of intangible assets would need to change significantly to avoid goodwill impairment.

Software Development Costs

The Company begins capitalizing software development costs, primarily third-party programmer fees, only after establishing commercial and technological feasibility. Annual amortization of these costs represents the greater of the amount computed using (i) the ratio that current gross revenues for the product(s) bear to the total current and anticipated future gross revenues of the product(s), or (ii) the straight-line method over the remaining estimated economic life of the product(s). Generally, depending on the nature and success of the product, such deferred costs are amortized over a five- to seven-year period. Amortization commences when the product is made commercially available.

The Company evaluates the recoverability of capitalized software based on estimated future gross revenues less the estimated cost of completing the products and of performing maintenance and product support. If gross revenues turn out to be significantly less than the Company’s estimates, the net realizable value of capitalized software intended for sale would be impaired.

Property and Equipment

Property and equipment are stated at cost. Depreciation and amortization are computed principally using the straight-line method over the estimated economic or useful lives of the applicable assets. Leasehold improvements are amortized over the lesser of the remaining life of the lease or the useful life of the improvements. The cost of maintenance and repairs is charged to expense as incurred.

Research and Development

Internally funded research and development costs including direct labor, material, subcontractor expenses and related overheads are expensed as incurred. Internally funded research and development costs were

F-16

MERGE HEALTHCARE SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

$9.5 million, $6.5 million, $14.6 million, and $8.6 million in the periods ended December 31, 2010 and April 27, 2010 and years ended December 31, 2009 and 2008, respectively.

Income Taxes

The Company provides for taxes based on current taxable income, and the future tax consequences of temporary differences between the financial reporting and income tax carrying values of its assets and liabilities (deferred income taxes). At each reporting period, management assesses the realizable value of deferred tax assets based on, among other things, estimates of future taxable income, and adjusts the related valuation allowance as necessary.

In each reporting period the Company assesses each individual tax position to determine if it satisfies some or all of the benefits of each position to be recognized in a company’s financial statements. The Company applies a two-step approach to recognizing and measuring uncertain tax positions accounted for in accordance with ASC No. 740. The first step prescribes a recognition threshold of more-likely-than-not, and the second step is a measurement attribute for all tax positions taken or expected to be taken on a tax return, in order to be recognized in the financial statements.

Loss Per Share

The following table sets forth the computation of basic and diluted loss per share (“EPS”):

	Periods Ended
							Years Ended December 31,
	(Successor			(Predecessor
	Company)			Company)			(Successor			(Predecessor
	December 31,			April 28,			Company)			Company)
	2010			2010			2009			2008
	(As adjusted,
	see Note B)
Numerator — net loss:	$	(20,095	)	$	(12,430	)	$	(4,010	)	$	(30,071	)
Denominator:
Basic weighted-average shares outstanding		NM	(1)		37,010			35,489			38,842
Effect of dilutive securities		NM	(1)		—			—			—
Diluted weighted-average shares outstanding		NM	(1)		37,010			35,489			38,842
Loss per share — basic		NM	(1)	$	(0.34	)	$	(0.11	)	$	(0.77	)
Loss per share — diluted		NM	(1)	$	(0.34	)	$	(0.11	)	$	(0.77	)

(1) Not meaningful

Stock options under the treasury method of zero, zero, 1.1 million, and 4.3 million shares were excluded from the diluted calculation for the periods ended December 31, 2010 and April 27, 2010 and the fiscal years ended December 31, 2009 and 2008, respectively, because their effect would be antidilutive.

As a result of the acquisition by Merge on April 28, 2010, all existing shares of MHSI were cancelled and 100 new shares were issued to Merge. Due to the small number of shares and the fact that Merge has sole ownership of such shares, the weighted-average shares outstanding and loss per share calculations are not meaningful.

Comprehensive Loss

Comprehensive loss is a measure of all changes in equity of an enterprise that results from recognized transactions and other economic events of a period other than transactions with owners in their capacity as owners. Comprehensive loss for the twelve months ended December 31, 2010 and December 31, 2009 consists

F-17

MERGE HEALTHCARE SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

of net loss, net unrealized gains on marketable securities and foreign currency translation adjustment. The components of accumulated other comprehensive loss are as follows:

	Years Ended December 31,
	(Successor		(Predecessor
	Company)		Company)
	2010		2009
	(As adjusted,
	see Note B)
Gain (loss) on marketable securities		—		(31	)
Foreign currency gain (loss)		—		6
Accumulated other comprehensive (loss) income	$	—	$	(25	)

Share Based Payment

The Company follows the guidance in FASB ASC 718 — Compensation (originally issued as SFAS 123(R), “Share Based Payment”). Under the fair value recognition provisions of this guidance, share-based compensation cost is measured at the grant date based on the value of the award and is recognized as expense over the requisite service period which is generally the vesting period. Determining the fair value of share-based awards at the grant date requires judgment, including estimating expected dividends, the term of related options, share price volatility and the amount of share-based awards that are expected to be forfeited. If actual results differ significantly from these estimates, share-based compensation expense and our results of operations could be materially impacted. See Note N for additional information related to share-based payments.

E.   Recent Accounting Pronouncements

The Company describes below recent pronouncements that have had or may have a significant effect on the financial statements or have an effect on disclosures. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to our financial condition, results of operations, or related disclosures.

In October 2009, the FASB issued ASC Update No. 2009-13, Multiple-Deliverable Revenue Arrangements (Update No. 2009-13). Update No. 2009-13, amends existing revenue recognition accounting pronouncements that are currently within the scope of FASB ASC Subtopic No. 605-25, Multiple Element Arrangements. Under the new guidance, when VSOE or third party evidence for deliverables in an arrangement cannot be determined, a best estimate of the selling price is required to separate deliverables and allocate arrangement consideration using the relative selling price method. The new guidance includes new disclosure requirements on how the application of the relative selling price method affects the timing and amount of revenue recognition. This new approach is effective for fiscal years beginning after June 15, 2010 and may be applied retrospectively or prospectively for new or materially modified arrangements. In addition, early adoption is permitted. The Company does not believe that adoption of this standard will have a material effect on its financial condition or results of operations.

In October 2009, the FASB issued ASC Update No. 2009-14, Certain Arrangements That Contain Software Elements (Update No. 2009-14). Update No. 2009-14 amends the scope of ASC Subtopic No. 985-605, Revenue Recognition, to exclude tangible products that include software and non-software components that function together to deliver the product’s essential functionality. This Update shall be applied on a prospective basis for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. Earlier application is permitted as of the beginning of a company’s fiscal year provided the company has not previously issued financial statements for any period within that year. An entity shall not elect early application of Update No. 2009-14 unless it also elects early application of Update

F-18

MERGE HEALTHCARE SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

No. 2009-13. The Company does not believe that adoption of this standard will have a material effect on its financial condition or results of operations.

In January 2010, the FASB issued ASC Update No. 2010-06, Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements (Update No. 2010-06). Update No. 2010-06 amends certain disclosure requirements of Subtopic 820-10, and provides additional disclosures for transfers in and out of Levels I and II and for activity in Level III. This Update also clarifies certain other existing disclosure requirements including level of desegregation and disclosures around inputs and valuation techniques. Update No. 2010-06 is effective for annual or interim reporting periods beginning after December 15, 2009, except for the requirement to provide the Level 3 activity for purchases, sales, issuances, and settlements on a gross basis. That requirement is effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. Early adoption is permitted. This Update does not require disclosures for earlier periods presented for comparative purposes at initial adoption. Since this Update only required additional disclosures, it did not have an impact on our financial position or results of operations.

In February 2010, the FASB issued ASC Update No. 2010-09, Subsequent Events (Topic 855) Amendments to Certain Recognition and Disclosure Requirements (Update No. 2010-09). This Update requires SEC registrants to evaluate subsequent events through the date that the financial statements are issued and removes the requirement to disclose the date through which management evaluated subsequent events. This guidance was effective immediately upon issuance.

In December 2010, the FASB issued ASC Update 2010-29, Business Combinations (Topic 805) — Disclosure of Supplementary Pro Forma Information for Business Combinations (Update No. 2010-29). This Update requires a public entity to disclose pro forma information for business combinations that occurred in the current reporting period. The disclosures include pro forma revenue and earnings of the combined entity for the current reporting period as though the acquisition date for all business combinations that occurred during the year had been as of the beginning of the annual reporting period. If comparative financial statements are presented, the pro forma revenue and earnings of the combined entity for the comparable prior reporting period should be reported as though the acquisition date for all business combinations that occurred during the current year had been as of the beginning of the comparable prior annual reporting period. This Update affects any public entity that enters into business combinations that are material on an individual or aggregate basis and is effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. Early adoption is permitted. Adoption of this Update will affect our disclosures of material business combinations in future periods.

F.   Acquisitions

On April 2, 2009, the Company completed the acquisition of Emageon, Inc. As a result of the acquisition the Company’s combined solution suite will include radiology PACS, cardiology PACS, radiology information systems, cardiology information systems, revenue cycle management systems, referring physician tools, business intelligence tools, and electronic medical record-enabling enterprise content management capabilities.

The goodwill of $1.2 million arising from the acquisition consists largely of synergies, the trained and assembled workforce, and economies of scale from combining the operations of Emageon and MHSI. None of the goodwill will be deductible for tax purposes.

The consolidated statement of operations for the December 31, 2009 includes the operating results of Emageon from the date of acquisition. These results include $36.9 million of revenues for the period April 2, 2009 through December 31, 2009.

F-19

MERGE HEALTHCARE SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The fair value of consideration transferred as of the acquisition date was $39.0 million which was paid in cash. The following table summarizes the amounts of the assets acquired and liabilities assumed recognized at April 2, 2009, the acquisition date:

Identifiable Assets Acquired and Liabilities Assumed	Amount
	(In thousands)
Cash	$	18,345
Accounts receivable		11,870
Inventories		2,005
Prepaid expenses and other current assets		4,214
Land		800
Building and improvements		4,260
Machinery and equipment		4,930
Restricted cash and other non-current assets		1,812
Identifiable intangible assets		10,000
Deferred revenue liability		(10,070	)
Accounts payable		(7,963	)
Accrued payroll and related costs		(2,098	)
Other long-term liabilities		(275	)
Goodwill		1,213
Total consideration	$	39,043

Pro Forma Financial Results (unaudited)

The following table presents unaudited pro forma condensed consolidated financial results from operations as if the acquisition described above had been completed at the beginning of each period presented:

	Years Ended December 31,
	2009		2008
	(Amounts in thousands, other than per share info)
Pro forma revenue	$	106,169	$	119,681
Pro forma net income (loss)		2,366		(36,360	)
Pro forma net income (loss) per share
Basic:	$	0.07	$	(0.94	)
Diluted:	$	0.06	$	(0.94	)
Weighted average number of shares outstanding
Basic:		35,489		38,842
Diluted:		36,588		38,842

These unaudited pro forma condensed consolidated financial results have been prepared for comparative purposes only and include certain adjustments, such as the adjustment of depreciation and amortization as if the acquisition occurred at the beginning of the fiscal year, the elimination of strategic alternatives expenses related to the acquisition of Emageon and the reduction of interest income to reflect the use of cash as if the acquisition occurred at the beginning of the period. They have not been adjusted for the effect of costs or synergies that would have been expected to result from the integration of the Company and Emageon or for costs that are not expected to recur as a result of the acquisition. The pro forma information does not purport

F-20

MERGE HEALTHCARE SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

to be indicative of the results of operations that actually would have resulted had the acquisition occurred at the beginning of each period presented, or of future results of the consolidated entities.

Other Acquisitions

The Company (Successor) completed two other acquisitions in 2010 for total consideration of $5.4 million, including $4.0 million in cash (of which $0.8 million is still owed as of December 31, 2010) and 500,000 shares of Merge common stock at a value of $1.4 million. The value of the common stock was pushed down to the Company and is recorded in shareholders’ equity as part of the investment by Merge. As a result of these acquisitions, we recorded intangible assets subject to amortization of $1.5 million and goodwill of $4.9 million, all of which is expected to be deductible for tax purposes. Our financial statements include the operating results of each business from the date of acquisition. Pro forma results of operations for these acquisitions have not been presented because the effects of the acquisitions, both individually and in aggregate, were not material to the Company’s financial results.

G.   Marketable Securities

Marketable securities include available-for-sale investments that may be sold in the current period or used in current operations. Investments in U.S. government and municipal obligations are classified as available-for-sale and are reported at fair value with unrealized gains and losses reported as other comprehensive income. As a result of the sale of the available-for-sale securities in January 2010, a loss of $13,000 was realized.

As of December 31, 2010, there were no marketable securities outstanding. As of December 31, 2009, marketable securities consisted of the following:

	December 31, 2009
			Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(Amounts in thousands)
(Predecessor Company)
Available for sale, marketable securities:
State and municipal obligations	$	26,019	$	34	$	(35	)	$	26,018
Federal agency obligations		6,404		13		(42	)		6,375
Commercial Paper		6,499		—		(4	)		6,495
Total	$	38,922	$	47	$	(81	)	$	38,888

The contractual maturities of our available-for-sale state and municipal obligation are as follows:

	December 31,
	(Successor		(Predecessor
	Company)		Company)
	2010		2009
	(As adjusted,
	see Note B)
	(Amounts in thousands)
Due within one year	$	—	$	14,369
Due between one to five years		—		8,889
Due between five to ten years		—		900
Due after 10 years		—		14,730
Total	$	—	$	38,888

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MERGE HEALTHCARE SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

H.   Property and Equipment

Major classes of property and equipment consist of the following:

	December 31,
	(Successor		(Predecessor
	Company)		Company)
	2010		2009
	(As adjusted,
	see Note B)
	(In thousands)
Land	$	—	$	800
Building		—		4,260
Equipment, primarily computers, and software		4,824		8,424
Equipment under capital lease obligations		—		563
Furniture and other		1,023		1,663
		5,847		15,710
Less accumulated depreciation and amortization		2,433		7,592
	$	3,414	$	8,118

Depreciation and amortization expense of these assets totaled $2.3 million, $1.0 million, $2.6 million, and $0.7 million for the periods ended December 31, 2010 and April 27, 2010 and years ended December 31, 2009 and 2008, respectively.

The Company entered into a sale-leaseback transaction for the Hartland facility on November 10, 2010, as allowed under the terms of the Notes. The Company received $6.1 million in proceeds from the sale and recorded a gain on the sale of $0.2 million, which is being deferred and amortized into rent expense over the 15 year term of the lease.

I.   Goodwill, Acquired or Developed Software and Other Intangible Assets

Major classes of intangible assets consist of the following:

			December 31,
			2010
			(Successor Company, as adjusted, see							2009
			Note B)							(Predecessor Company)
	Estimated		Gross					Net		Gross					Net
	Remaining		Carrying		Accumulated			Carrying		Carrying		Accumulated			Carrying
	Life		Amount		Amortization			Value		Amount		Amortization			Value
	(Years)
Goodwill		indefinite	$	152,334	$	—		$	152,334	$	1,213	$	—		$	1,213
Developed software		2.0	$	312	$	(294	)	$	18	$	—	$	—		$	—
Purchased software		6.7		23,290		(2,672	)		20,618		21,002		(13,017	)		7,985
			$	23,602	$	(2,966	)	$	20,636	$	21,002	$	(13,017	)	$	7,985
Trademarks			$	—	$	—		$	—	$	1,900	$	(771	)	$	1,129
Trade names		10.9		4,050		(264	)		3,786		400		(38	)		362
Customer related assets		8.9		33,430		(1,970	)		31,460		4,100		(342	)		3,758
Backlog		4.0		8,110		(2,245	)		5,865		—		—			—
Non-compete agreements		6.3		3,100		(295	)		2,805		500		(41	)		459
			$	48,690	$	(4,774	)	$	43,916	$	6,900	$	(1,192	)	$	5,708

F-22

MERGE HEALTHCARE SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Goodwill is our primary intangible asset not subject to amortization. The changes in carrying amount in the periods ended December 31, 2010 and April 27, 2010, and the year ended 2009 are as follows:

	Total
	(Amounts in thousands)
(Predecessor Company)
Balance at January 1, 2009	$	—
Goodwill due to Emageon acquisition		1,213
Balance at December 31, 2009		1,213
Balance at April 27, 2010	$	1,213
(Successor Company, as adjusted, see Note B)
Carrying amounts of the transferring entity at April 28, 2010	$	17,049
Goodwill due to AMICAS acquisition		130,384
Goodwill due to other acquisitions		4,901
Balance at December 31, 2010	$	152,334

As a result of decisions related to overlapping products, the Successor Company recorded $2.3 million in impairment expense in the period ended June 30, 2010 to fully write off certain purchased software assets related to products from which it expects no future benefit.

Amortization expense, excluding impairment, of the identifiable intangible assets totaled $7.1 million, $1.2 million, $3.4 million, and $2.6 million for the periods ended December 31, 2010 and April 27, 2010 and the years ended December 31, 2009 and 2008, respectively. Amortization of acquired software and backlog is recognized in the accompanying statements of operations as a cost of sale. Amortization of trade names, customer related assets and non-compete agreements is included in depreciation and amortization within operating expenses.

The future estimated amortization expense of the identifiable intangible assets is as follows:

	2011		2012		2013		2014		2015		Thereafter		Total
	(Amounts in thousands)
Purchased and developed software	$	3,284	$	3,266	$	3,267	$	3,266	$	2,346	$	5,207	$	20,636
Trade names		356		356		356		356		352		2,010		3,786
Customer related assets		4,100		5,316		5,217		4,466		3,660		8,701		31,460
Backlog		3,745		1,334		554		232						5,865
Non-compete agreements		443		443		443		443		443		590		2,805
	$	11,928	$	10,715	$	9,837	$	8,763	$	6,801	$	16,508	$	64,552

F-23

MERGE HEALTHCARE SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

J.   Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consisted of the following:

	December 31,
	(Successor		(Predecessor
	Company)		Company)
	2010		2009
	(As adjusted,
	see Note B)
	(Amounts in thousands)
Accounts payable	$	4,640	$	3,344
Accrued expenses		12,780		5,258
Taxes payable		119		697
Restructuring accrual		1,366		—
Total accounts payable and accrued expenses	$	18,905	$	9,299

K.   Debt and Operating Leases

Merge issued $200.0 million of Notes in order to finance the acquisition of AMICAS, now known as MHSI. The Notes were issued at 97.266% of the principal amount, bear interest at 11.75% of principal (payable on May 1st and November 1st of each year) and will mature on May 1, 2015. The Notes were offered in a private placement pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended. In connection with the Notes, Merge incurred issuance costs of $9.0 million (which are recorded in other assets on the condensed consolidated balance sheet as of December 31, 2010). These issuance costs are recorded as a long-term asset and amortized over the life of the Notes using the effective interest method. On November 1, 2010, Merge made the first interest payment totaling $11.9 million.

At any time on or prior to May 1, 2013, Merge may redeem any of the Notes at a price equal to 100% of the principal amount thereof plus an applicable “make-whole” premium plus accrued and unpaid interest, if any, to the redemption date. At any time and from time to time during the twelve month period commencing May 1, 2013, Merge may redeem the Notes, in whole or in part, at a redemption price equal to 105.875% of the principal amount thereof and accrued and unpaid interest, if any, to the redemption date. At any time and from time to time after May 1, 2014, Merge may redeem the Notes, in whole or in part, at a redemption price equal to 100% of the principal amount thereof and accrued and unpaid interest, if any, to the redemption date. In addition, prior to May 1, 2013, Merge may redeem up to 35% of the Notes at a redemption price equal to 100% of the principal amount thereof plus accrued and unpaid interest, if any, using proceeds from permitted sales of certain kinds of our capital stock. Upon the occurrence of a change of control or the sale of substantially all of its assets, Merge may be required to repurchase some or all of the Notes. The obligations under the Notes are fully and unconditionally guaranteed, jointly and severally, on a senior, secured basis by all of Merge’s current and future domestic restricted subsidiaries. The Notes and guarantees are secured by a first-priority lien on certain collateral which comprises substantially all of the Company’s and the other guarantors’ tangible and intangible assets, subject to certain exceptions.

In addition, the Notes contain certain covenants with varying restriction levels, which may limit the ability of Merge or the Company to:

•  Incur additional indebtedness or issue preferred stock;

•  Pay dividends or make distributions with respect to capital stock;

•  Make investments or certain other restricted payments;

•  Pay dividends or enter into other payment restrictions affecting certain subsidiaries;

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MERGE HEALTHCARE SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

•  Engage in certain sale-leaseback transactions;

•  Enter into transactions with stockholders or affiliates;

•  Guarantee debt;

•  Sell assets;

•  Create liens;

•  Issue or sell stock of certain subsidiaries; and

•  Merge or consolidate.

Since the Notes were issued to complete the acquisition of the Company and the assets and stock of the Company are pledged as collateral for the Notes, the Notes, original issuer discount, debt issuance costs and the related interest expense (including amortization of debt discount and issuance costs) are reflected in the financial statements of the Company.

The Company has non-cancelable operating leases at various locations. The Company’s significant operating leases are all facility leases as set forth in the following table:

	Square		Annual Lease
Location	Footage		Payments		End of Term
			(In thousands)
Hartland, Wisconsin		81,000	$	669	November 2025
Daytona Beach, Florida		36,000		319	April 2012

As allowed under the terms of the Note agreement, the Company entered into a sale-leaseback transaction on November 10, 2010 in which it sold the Hartland facility for $6.1 million and entered into an operating lease with a term of 15 years.

Certain office leases provide for contingent payments based on building operating expenses. Rental expenses for the periods ended December 31, 2010 and April 27, 2010 and the years ended December 31, 2009 and 2008 totaled $0.6 million, $0.4 million, $2.3 million, and $1.3 million, respectively.

The table below shows the future minimum lease payments due under non-cancellable leases as of December 31, 2010 (in thousands):

2011	$	3,317
2012		2,445
2013		1,113
2014		669
2015		669
Thereafter		6,633
Total minimum lease payments	$	14,846

The above obligations include lease payments related to facilities that the Company has either ceased to use or abandoned as of December 31, 2010. For those facilities abandoned subsequent to the acquisition by Merge, the related obligations have been recorded as a restructuring accrual in accounts payable and accrued expenses. For those facilities which were abandoned prior to the acquisition by Merge, the related short-term obligations are recorded in leases payable and the long-term obligations are recorded in other long term liabilities in the Company’s consolidated balance sheet as of December 31, 2010.

The Company generally includes intellectual property indemnification provisions in its software license agreements. Pursuant to these provisions, the Company holds harmless and agrees to defend the indemnified

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MERGE HEALTHCARE SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

party, generally its business partners and customers, in connection with certain patent, copyright, trademark and trade secret infringement claims by third parties with respect to the Company’s products. The term of the indemnification provisions varies and may be perpetual. In the event an infringement claim against the Company or an indemnified party is made, generally the Company, in its sole discretion, agrees to do one of the following: (i) procure for the indemnified party the right to continue use of the software, (ii) provide a modification to the software so that its use becomes noninfringing; (iii) replace the software with software which is substantially similar in functionality and performance; or (iv) refund all or the residual value of the software license fees paid by the indemnified party for the infringing software. The Company believes the estimated fair value of these intellectual property indemnification agreements is minimal. The Company has no liabilities recorded for these agreements as of December 31, 2010.

L.   Commitments and Contingencies

In January 2010, a purported stockholder class action complaint was filed in the Superior Court of Suffolk County, Massachusetts in connection with AMICAS’ proposed acquisition by Thoma Bravo, LLC (the “Thoma Bravo Merger”). A second similar action was filed in the same court in February 2010 and consolidated with the first action. In March 2010, because AMICAS had terminated the Thoma Bravo Merger and agreed to be acquired by Merge, the court dismissed the plaintiffs’ claims as moot. Subsequently, counsel to the plaintiffs filed an application for approximately $5,000 of attorneys’ fees for its work on this case, which fee petition AMICAS opposed. The Company retained litigation counsel to defend against the fee petition. On December 4, 2010, the court awarded plaintiffs approximately $3,200 in attorneys’ fees and costs. AMICAS has filed a notice of appeal from this judgment, and the plaintiffs have cross-appealed. The Company previously tendered the defense in this matter to its appropriate insurers, who have provided coverage against the claims asserted against AMICAS. After receipt of the court’s attorneys’ fee award decision, the applicable insurer denied policy coverage for approximately $2,500 of the fee award. The Company does not believe that the insurer’s denial has merit and has retained counsel to contest it. The Company will vigorously assert all of its rights under the applicable insurance policies, which the Company believes cover the claims and expenses incurred by AMICAS or Merge in connection with the fee award. However, an adverse outcome could negatively impact the Company’s financial condition.

In addition to the matters discussed above, the Company is, from time to time, parties to legal proceedings, lawsuits and other claims incident to our business activities. Such matters may include, among other things, assertions of contract breach or intellectual property infringement, claims for indemnity arising in the course of the Company’s business and claims by persons whose employment has been terminated. Such matters are subject to many uncertainties and outcomes are not predictable. The Company is unable to estimate the ultimate aggregate amount of monetary liability, amounts which may be covered by insurance or recoverable from third parties, or the financial impact with respect to these matters as of the date of this report.

Guarantees

The Company has identified the guarantee described below as required to be disclosed in accordance with FASB ASC 460 — Guarantees (originally issued as FASB Interpretation 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others, an interpretation of FASB Statements No. 5, 57, and 107 and rescission of FASB Interpretation No. 34”).

During the second quarter of 2009, in connection with the financing arrangement of a customer, the Company provided a guarantee to the lender on behalf of the customer. The Company has recorded a liability as deferred revenue for this guarantee which represented approximately $0.8 million and $1.0 million at December 31, 2010 and 2009, respectively. Revenue is recognized as the guarantee is reduced. In the periods

F-26

MERGE HEALTHCARE SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

ended December 31, 2010 and April 27, 2010, $0.1 million and $0.1 million, respectively, were recognized as revenue.

M.   Restructuring and Related Costs

The Company incurred restructuring charges of $4.2 million, zero, $3.8 million, and zero in the periods ended December 31, 2010 and April 27, 2010 and years ended December 31, 2009 and 2008, respectively. These charges were recorded in restructuring severance and impairment charges in our statements of operations.

Second Quarter 2009 Initiative

During the second quarter of 2009, subsequent to the acquisition of Emageon, the Company initiated actions to consolidate the facilities, reduce personnel expenses and dispose of excess assets including leasehold improvements in certain facilities. In 2009, the Company recognized restructuring related charges of $3.8 million, consisting of $2.3 million in severance and related employee termination costs, $0.6 million in disposal of leasehold improvements, furniture and equipment, and $0.9 million in contract exit costs, primarily consisting of future lease payment on the Company’s Birmingham, Alabama leased office, which the Company vacated during the second quarter of 2009.

Second Quarter 2010 Initiative

On April 29, 2010, the Company committed to a restructuring initiative to materially reduce its workforce and exit certain facilities. This action was taken concurrent with Merge’s acquisition of MHSI based upon its assessment of ongoing personnel needs. In the third quarter of 2010, the Company exited the Boston, Massachusetts, Bellevue, Washington and West Allis, Wisconsin facilities as part of the plan for this initiative. In 2010, the Company recognized restructuring related charges of $4.2 million, consisting of $1.9 million in severance and related employee termination costs, $0.5 million in relocation costs, and $1.8 million in contract exit costs, primarily consisting of future lease payments on the Company’s leased facilities which were vacated during the third quarter of 2010.

F-27

MERGE HEALTHCARE SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table shows the restructuring activity for the periods ended December 31, 2010 and April 27, 2010 and year ended December 31, 2009:

	Second Quarter 2009 Initiative
	Severance			Facilities			Relocation		Total
	(Amounts in thousands)
(Predecessor Company)
Balance at December 31, 2008	$	—		$	—		$	—	$	—
Charges to expense		902			951			—		1,853
Payments		(606	)		(440	)		—		(1,046	)
Reversed		(86	)		—			—		(86	)
Balance at December 31, 2009		210			511			—		721
Charges to expense		—			—			—		—
Payments		(180	)		(158	)		—		(338	)
Reversed		—			—			—		—
Balance at April 27, 2010		30			353			—		383
(Successor Company, as adjusted, see Note B)
Charges to expense		—			—			—		—
Payments		(30	)		(353	)		—		(383	)
Reversed		—			—			—		—
Balance at December 31, 2010	$	—		$	—		$	—	$	—

	Second Quarter 2010 Initiative
	Severance			Facilities			Relocation			Total
	(Amounts in thousands)
(Predecessor Company)
Balance at April 27, 2010	$	—		$	—		$	—		$	—
(Successor Company, as adjusted, see Note B)
Charges to expense		1,872			1,853			505			4,230
Payments		(1,637	)		(283	)		(463	)		(2,383	)
Reversed		—			—			—			—
Balance at December 31, 2010	$	235		$	1,570		$	42		$	1,847

F-28

MERGE HEALTHCARE SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

	Total Initiatives
	Severance			Facilities			Relocation			Total
	(Amounts in thousands)
(Predecessor Company)
Balance at December 31, 2008	$	—		$	—		$	—		$	—
Charges to expense		902			951			—			1,853
Payments		(606	)		(440	)		—			(1,046	)
Reversed		(86	)		—			—			(86	)
Balance at December 31, 2009		210			511			—			721
Charges to expense		—			—			—			—
Payments		(180	)		(158	)		—			(338	)
Reversed		—			—			—			—
Balance at April 27, 2010		30			353			—			383
(Successor Company, as adjusted, see Note B)
Charges to expense		1,872			1,853			505			4,230
Payments		(1,667	)		(636	)		(463	)		(2,766	)
Reversed		—			—			—			—
Balance at December 31, 2010	$	235		$	1,570		$	42		$	1,847

N.   Stockholders’ Equity

As a result of the acquisition by Merge on April 28, 2010, all existing shares of MHSI common stock were cancelled and 100 new shares were issued to Merge. Stockholders’ equity as of April 28, 2010 includes an investment by Merge of $38.4 million, which represents the difference between total acquisition consideration paid by Merge of $223.9 million less $185.5 million in proceeds from the issuance of the Notes, net of discount and debt issuance costs. Stockholders’ equity as of April 28, 2010 also includes the carrying amounts of the transferring entity (Merge) for such accounts of the other subsidiaries which were merged into MHSI effective January 1, 2011.

Employee Savings Plans

The Company maintains an employee savings plan that qualifies as a cash or deferred salary arrangement under Section 401(k) of the Internal Revenue Code. The Company may make matching and/or profit-sharing contributions to the plan at its sole discretion. In the periods ended December 31, 2010 and April 27, 2010 and years ended December 31, 2009 and 2008, the Company authorized matching contributions of $0.5 million, $0.2 million, $0.7 million, and $0.6 million, respectively, to the plan, which represent two-thirds of each participant’s contribution, not to exceed 4% of pre-tax compensation. The matching contributions were paid in cash. Employees become fully vested with respect to Company contributions after two years of service. Participating employees may now defer up to 80% of their pre-tax compensation but not more than $16,500 per calendar year plus any applicable catch up limits.

Employee Stock Purchase Plan

The Company’s 2007 Employee Stock Purchase Plan (the “ESPP”), as approved by the Company’s shareholders in June 2007, permits eligible employees to purchase the Company’s common stock at a discounted price through periodic payroll deductions of up to 15% of their cash compensation. Generally, each offering period will have a maximum duration of six months and shares of common stock will be purchased

F-29

MERGE HEALTHCARE SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

for each participant at the conclusion of each offering period. The price at which the common stock is purchased under the ESPP is equal to 85% of the lower of (i) the closing price of the common stock on the first business day of the offering period, or (ii) the closing price on the last business day of the offering period. In February 2009, the Company issued 84,470 shares for the offering period ended January 2009. In August 2009, the Company issued 56,810 shares related to the offering period ended July 2009. In February 2010, the Company issued 75,899 shares for the offering period ended January 2010. The ESPP has been suspended, effective with the end of the offering period that ended January 31, 2010.

Stock Option Plans

As a result of the acquisition by Merge, all in-the-money stock options were paid in cash and the shares were cancelled. Total cash paid by the Company for the in-the-money options was $22.3 million.

Share-Based Payment

Stock based compensation is accounted for in accordance with the provisions of FASB ASC 718 — Stock Compensation. ASC 718 requires the recognition of the fair value of stock-based compensation as an expense in the calculation of net income. The Company recognizes stock-based compensation expense ratably over the vesting period of the individual equity instruments. The fair value of stock awards is estimated using the Black-Scholes option valuation method.

The Company recorded the following amounts of stock-based compensation expense in its consolidated statements of operations for the periods ended December 31, 2010, April 27, 2010, and the years ended December 31, 2009 and December 31, 2008:

	Periods Ended				Years Ended December 31,
	(Successor		(Predecessor
	Company)		Company)		(Predecessor		(Predecessor
	December 31,		April 27,		Company)		Company)
	2010		2010		2009		2008
	(As adjusted, see Note B)
	(Amounts in thousands)
Share-based compensation expense included in the statement of operations:
Cost of revenues, maintenance and service	$	131	$	133	$	298	$	138
Research and development		80		232		466		413
Selling, general and administrative		409		1,058		1,274		973
Total	$	620	$	1,423	$	2,038	$	1,524

F-30

MERGE HEALTHCARE SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

In the period ended April 27, 2010 and years ended December 31, 2009 and December 31, 2008 the Company used the following assumptions in the Black-Scholes valuation model:

	(Successor Company)	(Predecessor Company)		(Predecessor Company)		(Predecessor Company)
	Period Ended	Period Ended		Year Ended		Year Ended
	December 31, 2010	April 27, 2010		December 31, 2009		December 31, 2008
	Merge Stock		Employee		Employee		Employee
	Option	Stock Option	Stock	Stock Option	Stock	Stock Option	Stock
	Plan	Plan	Purchase Plan	Plan	Purchase Plan	Plan	Purchase Plan
Average risk-free interest rate	0.81% - 2.13%	1.77%	0.28%	2.03%	0.28%	2.19%	1.88%
Expected dividend yield	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
Expected stock price volatility	100.00%	51.0% - 51.8%	72.2%	51.0% - 55.5%	72.2%	43.6% - 51.4%	47.9%
Weighted-average expected life (in years)	4.0	5.4	0.5	5.3	0.5	5.9	0.5
Weighted-average fair value	$1.75	$1.10	$1.17	$1.02	$1.17	$0.96	$0.91

The dividend yield of zero is based on the fact that the Company has never paid cash dividends and has no present intention to pay cash dividends. Expected volatility is based on the historical volatility of the Company’s common stock over a period which reflects the Company’s expectations of future volatility. The risk-free interest rate is derived from U.S. Treasury rates during the period, which approximate the rate in effect at the time of the grant. The expected life calculation is based on the observed and expected time to post-vesting exercise and forfeitures of options by the Company’s employees. The assumptions for the period ended December 31, 2010 are those used by Merge, since stock-based compensation expense in this period related to options granted under Merge’s plan to MHSI employees.

Based on historical experience of option pre-vesting cancellations, the Company assumed an annualized forfeiture rate of 7.0%, and 5.3% for its options December 31, 2009 and December 31, 2008, respectively.

F-31

MERGE HEALTHCARE SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

A summary of stock option activity and related information for the periods ended December 31, 2010 and April 27, 2010 and the years ended December 31, 2009 and 2008 are as follows:

								Weighted
	Shares					Weighted		Average		Aggregate
	Available					Average		Remaining		Instrinsic
	for Grant		Shares			Exercise Price		Contractual Term		Value(1)
								(Years)
	(Shares in thousands)
(Predecessor Company)
Outstanding at December 31, 2007		6,058		7,047		$	3.28		5.03	$	1,519
Granted				2,410			2.06
Exercised				(17	)		1.78				18
Forfeited				(1,131	)		3.61
Outstanding at December 31, 2008		3,720		8,309		$	2.88		5.65	$	241
Granted				1,422			2.12
Exercised				(1,059	)		2.08				801
Forfeited				(780	)		6.09
Outstanding at December 31, 2009		3,077		7,892		$	2.57		6.14	$	22,704
Granted				—			—
Exercised				—			—
Forfeited				(7,892	)	$	2.57
Outstanding at April 27, 2010		—		—		$	—		—	$	—
(Successor Company, as adjusted, see Note B)
Carrying amounts of the transferring entity at April 28, 2010				1,107		$	5.32		3.76	$	366
Granted				1,765			1.74
Exercised				—			—
Forfeited				(614	)		3.07
Outstanding at December 31, 2010		—		2,258		$	3.44		6.09	$	2,252
(Predecessor Company)
Options exercisable at December 31, 2008				5,161		$	3.20		3.77	$	80
Options exercisable at December 31, 2009				4,857		$	2.77		4.84	$	13,010
Options exercisable at April 27, 2010				—		$	—		—	$	—
(Successor Company, as adjusted, see Note B)
Options exercisable at April 28, 2010				446		$	8.73		2.37	$	91
Options exercisable at December 31, 2010				495		$	6.12		3.17	$	334

F-32

MERGE HEALTHCARE SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(1) The aggregate intrinsic value on this table was calculated based on the positive difference between the closing market value of the Company’s common stock on the dates indicated and the exercise price of the underlying options.

In the period ended April 27, 2010, the Company received $0.2 million from employees upon exercise of options and ESPP. There were no tax benefits recognized related to the exercise of options. In accordance with Company policy, the shares were issued from a pool of shares reserved for issuance under the plan.

At December 31, 2010, there was $2.5 million of unrecognized compensation cost related to stock option share-based payments. The Company expects this compensation cost will be recognized over a weighted-average period of 3.3 years.

Restricted Stock

A summary of the Company’s restricted stock activity and related information for the periods ended December 31, 2010 and April 27, 2010 and years ended December 31, 2009 and 2008 is as follows:

				Weighted
	Shares of			Average
	Restricted			Grant Date
	Stock			Fair Value
(Predecessor Company)
Restricted at December 31, 2007		25,985		$	3.23
Granted		36,269			2.79
Unrestricted		(25,985	)		3.23
Restricted at December 31, 2008		36,269			2.79
Granted		60,690			2.62
Unrestricted		(36,269	)		2.79
Restricted at December 31, 2009		60,690			2.62
Granted		—			—
Unrestricted		—			—
Cancelled		(60,690	)		2.62
Restricted at April 27, 2010		—			—
(Successor Company, as adjusted, see Note B)
Carrying amounts of the transferring entity at April 28, 2010		213,332		$	1.50
Granted		—			—
Unrestricted		(213,332	)		1.50
Restricted at December 31, 2010		—		$	—

As a result of the acquisition, all remaining outstanding restricted shares of MHSI were cancelled and holders were paid cash of $6.05 per share. The successor company restricted stock balance at April 28, 2010, consists of Merge restricted stock awards granted to MHSI employees. All awards were vested in full in 2010. In the period ended December 31, 2010, the Company recognized $0.1 million in expense for Merge restricted stock awards in its statement of operations.

F-33

MERGE HEALTHCARE SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

O.   Income Taxes

The components of the income tax provision are as follows:

	Periods Ended					Years Ended December 31,
	(Successor			(Predecessor
	Company)			Company)		(Predecessor			(Predecessor
	December 31,			April 27,		Company)			Company)
	2010			2010		2009			2008
	(As adjusted, see
	Note B)
	(Amounts in thousands)
Income tax (benefit) provision
Current federal	$	(83	)	$	—	$	(362	)	$	—
Current state		268			46		(1,208	)		158
Total current (benefit) provision		185			46		(1,570	)		158
Deferred federal		283			—		820			(1,907	)
Deferred state		123			—		197			(525	)
Valuation allowance		—			—		(1,017	)		2,432
Total deferred (benefit) provision		406			—		—			—
Total provision (credit) for income taxes	$	591		$	46	$	(1,570	)	$	158

The provision (credit) for income taxes attributable to income (loss) from continuing operations differs from the computed expense by applying the U.S. federal income tax rate of 35% to pre-tax income (loss) from continuing operations as a result of the following:

	Periods Ended						Years Ended December 31,
	(Successor			(Predecessor
	Company)			Company)			(Predecessor			(Predecessor
	December 31,			April 27,			Company)			Company)
	2010			2010			2009			2008
	(As adjusted, see
	Note B)
	(Amounts in thousands)
Benefit computed at statutory rates	$	(6,826	)	$	(4,351	)	$	(2,013	)	$	(10,469	)
States taxes, net of federal benefit		1,121			30			226			(239	)
Permanent differences including nondeductible acquisition costs		55			2,953			947			374
Goodwill impairment		—			—			—			8,035
Nondeductible interest		6,058			—			—			—
Reversal of ASC 740 (FIN 48) reserves		—			—			(1,382	)		—
AMT refund, net of current payable		(79	)		—			(362	)		—
Change in valuation allowances and other		262			1,414			1,014			2,457
Actual income tax benefit	$	591		$	46		$	(1,570	)	$	158

F-34

MERGE HEALTHCARE SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their tax bases. Significant components of deferred income tax assets and liabilities are as follows:

	December 31,
	(Successor			(Predecessor
	Company)			Company)
	2010			2009
	(As adjusted,
	see Note B)
	(Amounts in thousands)
Deferred income tax assets:
Allowance for doubtful accounts	$	256		$	285
Goodwill amortization		—			4,789
Accrued expenses		1,413			755
Deferred revenue		—			489
Net operating loss carry forwards		73,369			38,296
Credit carry forwards		5,430			3,533
Share-based payment		49			1,602
Difference between book and tax bases of property and equipment		3,553			1,305
Other		244			1,134
		84,314			52,188
Less: Valuation allowance		(55,423	)		(50,386	)
		28,891			1,802
Deferred income tax liabilities:
Acquired/developed software		9,257			1,364
Deferred revenue		3,584			—
Intangible assets		16,456			438
		29,297			1,802
Net deferred income tax liability	$	(406	)	$	—

As of December 31, 2010, the Company has U.S. federal, state and foreign net operating loss carryforwards of approximately $226.1 million, $133.5 million and $5.2 million, respectively, which will expire at various dates through 2030. As of December 31, 2010, the Company has U.S. federal, state and foreign tax credit carryforwards of $4.0 million, $0.3 million and $0.4 million, respectively, which will expire at various dates through 2030. The Company also has $0.9 million of alternative minimum tax credit carryforwards with an indefinite life.

Management has assessed the recovery of the Company’s net deferred tax assets and recorded a $55.4 million valuation allowance as of December 31, 2010. Management’s assessment is based upon cumulative losses in recent years, significant unutilized net operating loss and credit carryforwards, limited carryback opportunities and uncertain future operating profitability. Management has also considered the effect of U.S. Internal Revenue Code (the “Code”) Section 382 on its ability to utilize its net operating loss and credit carryforwards. Section 382 imposes limits on the amount of tax attributes that can be utilized where there has been an ownership change as defined under the Code. A substantial portion of the Company’s net operating loss and credit carryforwards are attributable to acquired entities that will be subject to the ownership change limitations of Section 382. Based upon this analysis, a valuation allowance has been recorded in order to measure only the portion of the deferred tax assets more likely than not to be realized.

F-35

MERGE HEALTHCARE SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

As of December 31, 2010, the Company has $0.7 million in unrecognized tax benefits related to balances which were merged into the Successor Company as of April 28, 2010. There was no change in the Company’s unrecognized tax benefits for the period ended December 31, 2010. Prior to the mergers, the Predecessor Company had no unrecognized tax benefits as of December 31, 2010 and 2009. As of December 31, 2008, the Company had $1.1 million in unrecognized tax benefits that were recognized during 2009 due to the expiration of the statute of limitations. The Company accounts for interest and penalties related to uncertain tax positions as part of its provision for federal and state income taxes. As of December 31, 2008, the Company had accrued interest of $0.3 million related to unrecognized tax benefits that was reversed in 2009 due to the statute of limitations expiration. No interest was accrued as of December 31, 2010 or 2009. The Company has not recorded any penalties related to uncertain tax positions. The Company does not reasonably expect any significant change in unrecognized tax benefits within the next twelve months.

During 2010, the Internal Revenue Service (“IRS”) completed an examination of the Company’s U.S. federal income tax returns for the years ended December 31, 2007 and 2008 resulting in no change. The tax years 1997 through 2010 remain open however as carryforward attributes generated in years past may still be adjusted upon examination by the IRS and other taxing authorities if they have or will be used in a future period. Further, pre-acquisition period tax returns of acquired entities will likewise remain open to examination to the extent carryforward attributes arising from these pre-acquisition years have or will be used in a future period. The Company’s major tax jurisdiction is the U.S. federal.

P.   Quarterly Results of Operations (Unaudited)

	2010 Quarterly Results
	(Predecessor			(Predecessor			(Successor			(Successor			(Successor
	Company)			Company)			Company)			Company)			Company)
	March 31			April 27(1)			June 30(2)			September 30			December 31
							(As adjusted,			(As adjusted,			(As adjusted,
							see Note B)			see Note B)			see Note B)
	(Amounts in thousands, except for per share data)
Net sales	$	29,434		$	7,282		$	19,233		$	33,239		$	33,156
Gross margin		15,953			3,196			6,539			15,678			16,788
Income (loss) before income taxes		(1,705	)		(10,679	)		(10,015	)		(4,778	)		(4,711	)
Net income (loss)		(1,751	)		(10,679	)		(9,966	)		(4,778	)		(5,351	)
Basic income (loss) per share	$	(0.05	)	$	(0.34	)		NM	(3)		NM	(3)		NM	(3)
Diluted income (loss) per share		(0.05	)		(0.34	)		NM	(3)		NM	(3)		NM	(3)

(1)	Results displayed are for the period April 1, 2010 to April 27, 2010.
(2)	Results displayed are for the period April 28, 2010 to June 30, 2010.
(3)	Amounts are not meaningful due to the acquisition by Merge

	2009 Quarterly Results
	(Predecessor			(Predecessor			(Predecessor		(Predecessor
	Company)			Company)			Company)		Company)
	March 31			June 30			September 30		December 31
Net sales	$	11,271		$	23,493		$	27,196	$	27,182
Gross margin		5,786			10,537			13,154		13,572
Income (loss) before income taxes		(1,116	)		(6,505	)		502		1,539
Net income (loss )		(1,169	)		(6,585	)		1,676		2,068
Basic income (loss) per share	$	(0.03	)	$	(0.19	)	$	0.05	$	0.06
Diluted income (loss) per share		(0.03	)		(0.19	)		0.05		0.05

F-36

MERGE HEALTHCARE SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Q.   Supplemental Disclosure of Cash Flow Activities

The Company made cash payments, net of refunds, for income taxes of $(0.4) million, zero, $0.1 million and $0.1 million in the periods ended December 31, 2010 and April 27, 2010, and the years ended December 31, 2009 and 2008, respectively. The Company paid interest of $11.9 million in the period ended December 31, 2010. The Company paid $3.2 million in cash and held back $0.8 million for an acquisition in 2010, and paid $39.0 million for the acquisition of Emageon Inc. in 2009.

F-37

EX-99.8

EXHIBIT 99.8

MERGE HEALTHCARE SOLUTIONS INC.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND NOTES

FOR THE SIX MONTHS ENDED JUNE 30, 2011 AND 2010

INDEX

	Page
FINANCIAL INFORMATION
Condensed Consolidated Financial Statements	F-2
Condensed Consolidated Balance Sheets (Unaudited)	F-2
Condensed Consolidated Statements of Operations (Unaudited)	F-3
Condensed Consolidated Statements of Cash Flows (Unaudited)	F-4
Notes to Condensed Consolidated Financial Statements (Unaudited)	F-5

F-1

FINANCIAL INFORMATION
Condensed Consolidated Financial Statements

MERGE HEALTHCARE SOLUTIONS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	(Successor			(Successor
	Company)			Company)
	June 30,			December 31,
	2011			2010
	(Unaudited)
	(In thousands, except for share data)
ASSETS
Current assets:
Cash and cash equivalents, including restricted cash of $163 and $963 at June 30, 2011 and December 31, 2010, respectively	$	22,054		$	27,838
Accounts receivable, net of allowance for doubtful accounts of $1,566 and $1,011 at June 30, 2011 and December 31, 2010, respectively		44,077			41,809
Inventory		2,415			2,555
Prepaid expenses and other current assets		10,584			9,763
Total current assets		79,130			81,965
Property and equipment, net of accumulated depreciation of $3,540 and $2,433 at June 30, 2011 and December 31, 2010, respectively		3,272			3,414
Purchased and developed software, net of accumulated amortization of $4,606 and $2,966 at June 30, 2011 and December 31, 2010, respectively		19,156			20,636
Other intangibles, net of accumulated amortization of $8,804 and $4,774 at June 30, 2011 and December 31, 2010, respectively		37,199			43,916
Goodwill		154,218			152,334
Other assets		9,530			12,622
Total assets	$	302,505		$	314,887
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	16,936		$	18,905
Accrued employee compensation and benefits		3,997			3,171
Intercompany payables		5,449			5,147
Interest payable, current portion		3,917			3,917
Leases payable, current portion		479			639
Deferred revenue, current portion		33,538			41,712
Total current liabilities		64,316			73,491
Notes payable, long-term		195,514			195,077
Deferred revenue and other long term liabilities		6,926			5,849
Total liabilities		266,756			274,417
Shareholders’ equity:
Common stock, $0.001 par value: 1,000 shares authorized and 100 shares issued and outstanding at June 30, 2011 and December 31, 2010		—			—
Additional paid-in capital		112,549			111,565
Accumulated deficit		(76,800	)		(71,095	)
Total shareholders’ equity		35,749			40,470
Total liabilities and shareholders’ equity	$	302,505		$	314,887

See accompanying notes to unaudited condensed consolidated financial statements.

F-2

MERGE HEALTHCARE SOLUTIONS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	Six Months Ended			Periods Ended
	(Successor			(Successor			(Predecessor
	Company)			Company)			Company)
	June 30,			June 30,			April 27,
	2011			2010			2010
	(Unaudited)
	(In thousands, except for share and per share data)
Net sales:
Software licenses and system sales	$	23,582		$	3,686		$	7,525
Maintenance and services		53,960			15,547			29,191
Total net sales		77,542			19,233			36,716
Cost of sales:
Software licenses and system sales		12,382			2,742			3,411
Maintenance and services		17,552			6,423			12,753
Depreciation, amortization and impairment		3,510			3,528			1,403
Total cost of sales		33,444			12,693			17,567
Gross margin		44,098			6,539			19,149
Operating costs and expenses:
Selling, general and administrative		22,392			4,865			15,798
Research and development		7,035			3,070			6,486
Acquisition costs					30			8,439
Depreciation, amortization and impairment		6,791			1,555			787
Restructuring and other expenses		(36	)		2,734			—
Total operating costs and expenses		36,182			12,254			31,510
Operating income (loss)		7,916			(5,714	)		(12,361	)
Other income (expense):
Interest expense		(12,920	)		(4,370	)		(8	)
Interest income		162			59			13
Other, net		(308	)		10			(28	)
Total other expense		(13,066	)		(4,301	)		(23	)
Loss before income taxes		(5,150	)		(10,015	)		(12,384	)
Income tax expense (benefit)		555			(49	)		46
Net loss	$	(5,705	)	$	(9,966	)	$	(12,430	)
Net loss per share — basic		NM	(1)		NM	(1)		(0.34	)
Weighted average number of common shares outstanding — basic		NM	(1)		NM	(1)		37,010
Net loss per share — diluted		NM	(1)		NM	(1)	$	(0.34	)
Weighted average number of common shares outstanding — diluted		NM	(1)		NM	(1)		37,010

(1) Amount is not meaningful as a result of the acquisition by Merge

See accompanying notes to unaudited condensed consolidated financial statements.

F-3

MERGE HEALTHCARE SOLUTIONS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Six Months Ended			Periods Ended
	(Successor			(Successor			(Predecessor
	Company)			Company)			Company)
	June 30,			June 30,			April 27,
	2011			2010			2010
	(Unaudited)
	(In thousands)
Cash flows from operating activities:
Net loss	$	(5,705	)	$	(9,966	)	$	(12,430	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation, amortization and impairment		10,301			5,084			2,178
Provision for bad debts, net of recoveries		86			(313	)		2,032
Deferred income taxes		261			—			—
Non-cash stock based payments		984			125			1,423
Amortization of notes payable issuance costs and discount		1,155			—			—
Change in contingent consideration for acquisitions		128			177			—
Changes in operating assets and liabilities, net of effects of acquisitions, mergers and dispositions
Accounts receivable		(2,353	)		(1,858	)		(320	)
Prepaid expenses, other current assets and intercompany balances		971			1,392			(453	)
Accounts payable and accrued expenses		(2,708	)		6,390			(1,425	)
Deferred revenue		(7,406	)		3,389			(2,029	)
Net cash provided by (used in) operating activities		(4,286	)		4,420			(11,024	)
Cash flows from investing activities:
Cash paid for acquisitions, net of cash acquired		(600	)		—			—
Purchases of property, equipment, and leasehold improvements		(857	)		(18	)		(144	)
Change in restricted cash		800			—			—
Maturities of held-to-maturity securities		—			—			7,964
Sales of available-for-sale securities		—			—			30,924
Net cash provided by (used in) investing activities		(657	)		(18	)		38,744
Cash flows from financing activities:
Proceeds from issuance of debt, net of issuance costs paid		—			185,517			—
Principal payments on capital leases		(41	)		(20	)		—
Capital contribution by Merge		—			38,393			—
Payments to acquire outstanding shares		—			(223,910	)		—
Exercise of stock options and ESPP		—			—			1,526
Repurchase of Common Stock		—			—			(22,906	)
Net cash provided by (used in) financing activities		(41	)		(20	)		(21,380	)
Net increase (decrease) in cash and cash equivalents		(4,984	)		4,382			6,340
Cash and cash equivalents, beginning of period(1)		26,875			22,418			8,785
Cash and cash equivalents, end of period(2)	$	21,891		$	26,800		$	15,125

(1)	Cash net of restricted cash of $963 and $163 at December 31, 2010 and April 28, 2010, respectively
(2)	Cash net of restricted cash of $163 and $163 at June 30, 2011 and 2010, respectively

See accompanying notes to unaudited condensed consolidated financial statements.

F-4

Merge Healthcare Solutions Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited and in thousands, other than share and per share data)

(1)   Basis of Presentation and Significant Accounting Policies

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (SEC) for reporting on Form S-4. Accordingly, certain information and notes required by United States of America generally accepted accounting principles (GAAP) for annual financial statements are not included herein. These interim statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2010 of Merge Healthcare Solutions Inc. (MHSI or “the Company”), a Delaware corporation, which are included as an exhibit to this Registration Statement on Form S-4.

Principles of Consolidation

These unaudited condensed consolidated financial statements reflect all adjustments, which are, in the opinion of management, necessary for a fair presentation of the Company’s financial position and results of operations. Such adjustments are of a normal recurring nature, unless otherwise noted. The results of operations for the six month period ended June 30, 2011 are not necessarily indicative of the results to be expected for any future period.

The unaudited condensed consolidated financial statements are prepared in accordance with GAAP. These accounting principles require the Company to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company believes that the estimates, judgments and assumptions are reasonable, based on information available at the time they are made. Actual results could differ materially from those estimates. As a result of the acquisition by Merge Healthcare Incorporated (Merge) on April 28, 2010, the six months ended June 30, 2010 has been divided into two periods. The first period represents the pre-acquisition period (January 1, 2010 through April 27, 2010), while the second period represents the post-acquisition period (April 28, 2010 through June 30, 2010). Where applicable, the financial statements and related footnote disclosures throughout this document will refer to these periods as the periods ended April 27, 2010 and June 30, 2010.

The condensed consolidated financial statements for the pre-acquisition period include the accounts of AMICAS, Inc. and subsidiary only (now known as MHSI Predecessor Company). All significant intercompany accounts and transactions have been eliminated in consolidation. The condensed consolidated financial statements for the period subsequent to the acquisition date include the accounts of all entities merged into MHSI based on the updated corporate structure for MHSI as of January 1, 2011. Specifically, the account balances of Merge eMed, Inc., Merge CAD, Inc. and Cedara Software (USA) Limited as of April 28, 2010 represent the carrying amounts of the transferring entity (Merge Healthcare Incorporated) for the entities merged into MHSI. All significant intercompany accounts and transactions have been eliminated in consolidation.

Certain transactions which were directly related to the acquisition by Merge have been pushed down to the MHSI financial statements. The consolidated balance sheets of MHSI as of June 30, 2011 and December 31, 2010 include $200,000 of aggregate principal amount of 11.75% Senior Secured Notes due 2015 (Notes) and the related discount and debt issuance costs. The statements of operations for the six months ended June 30, 2011 and the period ended June 30, 2010 include the interest expense and amortization of debt discount and issuance costs related to these Notes. Also, stockholders’ equity within the consolidated balance sheet includes the investment by Merge which was used as partial consideration to complete the acquisition of MHSI (formerly known as AMICAS, Inc.).

F-5

Merge Healthcare Solutions Inc.

Notes to Condensed Consolidated Financial Statements — (Continued)

(2)   Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist primarily of expenses paid which will benefit future periods, revenue recognized that has not yet been billed to a customer and deferred taxes, all of which are due or recognizable within the next twelve months. The balances are comprised of the following as of June 30, 2011 and December 31, 2010:

	(Sucessor		(Sucessor
	Company)		Company)
	June 30,		December 31,
	2011		2010
	(Amounts in thousands)
Prepaid expenses	$	2,064	$	2,314
Unbilled A/R		7,556		6,557
Deferred tax asset		608		628
Other		356		264
Total prepaid expenses and other current assets	$	10,584	$	9,763

(3)   Goodwill and Other Intangible Assets

Goodwill

Changes in the carrying amount of goodwill for the six months ended June 30, 2011, are as follows:

	Total
	(Amounts
	in thousands)
Balance at December 31, 2010	$	152,334
Change due to an insignificant acquisition		1,884
Balance at June 30, 2011	$	154,218

Other Intangible Assets

Our intangible assets subject to amortization are summarized as of June 30, 2011 as follows:

			As of June 30, 2011							As of December 31, 2010
			(Successor Company)							(Successor Company)
	Estimated		Gross					Net		Gross					Net
	Remaining		Carrying		Accumulated			Carrying		Carrying		Accumulated			Carrying
	Life		Amount		Amortization			Value		Amount		Amortization			Value
			(Amounts in thousands)
	(Years)
Goodwill		indefinite	$	154,218	$	—		$	154,218	$	152,334	$	—		$	152,334
Developed software		1.4	$	312	$	(298	)	$	14	$	312	$	(294	)	$	18
Purchased software		6.2		23,450		(4,308	)		19,142		23,290		(2,672	)		20,618
			$	23,762	$	(4,606	)	$	19,156	$	23,602	$	(2,966	)	$	20,636
Trade names		10.1		1,133		(143	)		990		4,050		(264	)		3,786
Customer related assets		8.4		33,580		(4,033	)		29,547		33,430		(1,970	)		31,460
Backlog		3.5		8,100		(4,108	)		3,992		8,110		(2,245	)		5,865
Non-compete agreements		5.8		3,190		(520	)		2,670		3,100		(295	)		2,805
			$	46,003	$	(8,804	)	$	37,199	$	48,690	$	(4,774	)	$	43,916

F-6

Merge Healthcare Solutions Inc.

Notes to Condensed Consolidated Financial Statements — (Continued)

In the six months ended June 30, 2011, the Company increased the gross carrying amount of purchased software, customer relationships, trade names and non-competes by $160, $150, $30 and $90, respectively, related to an insignificant acquisition in 2011.

Upon completion of a product rebranding initiative in the second quarter of 2011, the Company recorded a $2,658 charge due to the impairment of trade names associated with certain products, based upon management’s estimates of future cash flows associated with these trade names. The Company also wrote off fully amortized gross carrying amounts and accumulated amortization of $2,947 in trade name assets. In the period ended June 30, 2010, as a result of decisions related to overlapping products, the Company recorded $2,271 of impairment expense to fully write off certain purchased software assets related to products from which the Company expects no future cash flows.

We recognized amortization and impairment expense of $8,706, $4,108 and $1,229, respectively, in the six months ended June 30, 2011 and the periods ended June 30, 2010 and April 27, 2010. Amortization of purchased and developed software and backlog is recognized in the accompanying statements of operations as cost of sales. Amortization of trade names, customer related assets and non-compete agreements is included in depreciation, amortization and impairment within operating expenses.

Estimated aggregate remaining amortization expense for the Company’s intangible assets, which become fully amortized in 2022, is as follows:

	2011		2012		2013		2014		2015		Thereafter		Total
	(Amounts in thousands)
Purchased and developed software	$	1,662	$	3,293	$	3,293	$	3,293	$	2,373	$	5,242	$	19,156
Trade names		54		104		98		98		98		538		990
Customer related assets		2,059		5,346		5,247		4,495		3,690		8,710		29,547
Backlog		1,872		1,334		554		232		—		—		3,992
Non-compete agreements		230		461		461		461		461		596		2,670
	$	5,877	$	10,538	$	9,653	$	8,579	$	6,622	$	15,086	$	56,355

(4)   Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consist primarily of trade accounts payable, restructuring accruals, taxes payable and other non-trade payables, all of which are due within the next twelve months. The balances are comprised of the following as of June 30, 2011 and December 31, 2010:

	(Sucessor		(Sucessor
	Company)		Company)
	June 30,		December 31,
	2011		2010
	(Amounts in thousands)
Accounts payable	$	4,403	$	4,640
Accrued expenses		11,441		12,780
Taxes payable		213		119
Restructuring accrual		879		1,366
Total accounts payable and accrued expenses	$	16,936	$	18,905

(5)  Fair Value Measurement

The Company’s financial instruments include cash and cash equivalents, accounts receivable, accounts payable, notes payable, and certain accrued liabilities. The carrying amounts of cash and cash equivalents

F-7

Merge Healthcare Solutions Inc.

Notes to Condensed Consolidated Financial Statements — (Continued)

(which are comprised primarily of deposit and overnight sweep accounts), accounts receivable, accounts payable, and certain accrued liabilities approximate fair value due to the short maturity of these instruments. The carrying value of notes payable approximates fair value due to the interest rates and terms approximating those available to the Company for similar obligations.

(6)   Restructuring

The following table sets forth the activity in the six months ended June 30, 2011, related to restructuring activities taken in prior years:

	Employee			Lease &
	Termination			Contract
	Costs			Exit Costs			Relocation			Total
Balance at December 31, 2010	$	235		$	1,570		$	42		$	1,847
Charges to expense		(11	)		—			(25	)		(36	)
Payments		—			(650	)		(15	)		(665	)
Balance at June 30, 2011	$	224		$	920		$	2		$	1,146

As of June 30, 2011, $879 of the remaining balance was recorded in accounts payable and other accrued expenses within current liabilities, with the remainder recorded in other long term liabilities.

(7)   Debt

In April 2010, the Merge issued $200,000 of Senior Secured Notes (Notes) at 97.266% of the principal amount, which bear interest at 11.75% of principal (payable on May 1st and November 1st of each year) and will mature on May 1, 2015. The Notes were offered in a private placement pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended. In connection with the Notes, Merge incurred issuance costs of $9,015. These issuance costs are recorded as a long-term asset and are being amortized over the life of the Notes using the effective interest method. Since the Notes were issued to complete the acquisition of the Company and the assets and stock of the Company are pledged as collateral for the Notes, the Notes, original issuer discount, debt issuance costs and the related interest expense (including amortization of debt discount and issuance costs) are reflected in the financial statements of the Company.

In June 2011, Merge issued an additional $52,000 in Notes at 103.0% of the principal amount with terms identical to the existing Notes. The proceeds of these additional Notes were used to redeem and retire Merge’s Series A Preferred Stock and to pay associated dividends. These additional Notes were offered in a private placement pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended. Prior to issuance, Merge received consents from the majority of holders of the existing Notes to amend the Indenture to allow it to incur the additional indebtedness. As consideration for the consents, Merge paid $1,528 in consent fees from the proceeds of the Notes. Merge also incurred $1,442 in costs related to the issuance of the additional Notes that did not qualify for capitalization. These additional Notes are not included in the financial statements of the Company. However, since the terms of the additional Notes are identical to the existing Notes, the Company’s assets and stock are pledged as collateral for these additional Notes. Also, the Company is a wholly-owned subsidiary of Merge and its cash flows will be used to service the additional Notes, as well as the existing Notes.

In the six months ended June 30, 2011, the Company recorded $12,906 of interest expense related to the Notes, including $719 in amortization of debt issuance costs and $436 in amortization of debt discount. In the period ended June 30, 2010, the Company recorded $4,368 of interest expense related to the Notes, including $276 in amortization of debt issuance costs and $176 in amortization of debt discount. As of June 30, 2011 and December 31, 2010, the notes payable balances on the Company’s balance sheet included $4,486 and $4,923, respectively, of unamortized net discount.

F-8

Merge Healthcare Solutions Inc.

Notes to Condensed Consolidated Financial Statements — (Continued)

(8)   Share-Based Compensation

The following table summarizes share-based compensation expense recognized during the periods indicated:

	Six Months
	Ended			Periods Ended
	(Successor			(Successor		(Predecessor
	Company)			Company)		Company)
	June 30,			June 30,		April 27,
	2011			2010		2010
	(Amounts in thousands)
Share-based compensation expense included in the statement of operations:
Cost of revenues, maintenance and service	$	71		$	26	$	133
Research and development		(27	)		30		232
Selling, general and administrative		940			69		1,058
Total	$	984		$	125	$	1,423

Stock option activity in the six months ended June 30, 2011 is set forth in the following table:

	Number of
	Options
Options outstanding, December 31, 2010		2,258,385
Options granted		1,135,000
Options exercised		—
Options forfeited and expired		(316,929	)
Options outstanding, June 30, 2011		3,076,456
Options exercisable, June 30, 2011		777,706

As of June 30, 2011, there was approximately $4,584 of unrecognized compensation cost related to stock options that may be recognized in future periods.

(9)   Commitments and Contingencies

In January 2010, a purported stockholder class action complaint was filed in the Superior Court of Suffolk County, Massachusetts in connection with AMICAS Inc.’s (AMICAS) proposed acquisition by Thoma Bravo, LLC (the “Thoma Bravo Merger”). A second similar action was filed in the same Court in February 2010 and consolidated with the first action. In March 2010, because AMICAS had terminated the Thoma Bravo Merger and agreed to be acquired by us, the Court dismissed the plaintiffs’ claims as moot. Subsequently, counsel for the plaintiffs filed an application for approximately $5,000 of attorneys’ fees for its work on this case, which fee petition AMICAS opposed. We retained litigation counsel to defend against the fee petition. On December 4, 2010, the Court awarded plaintiffs approximately $3,200 in attorneys’ fees and costs. AMICAS has filed a notice of appeal from this judgment, and the plaintiffs have cross-appealed. We previously tendered the defense in this matter to our appropriate insurers, who have provided coverage against the claims asserted against AMICAS. After receipt of the Court’s attorneys’ fee award decision, the applicable insurer denied policy coverage for approximately $2,500 of the fee award. We do not believe that the insurer’s denial has merit and have retained counsel to contest it. We will vigorously assert all of our rights under our applicable insurance policies, which we believe cover the claims and expenses incurred by AMICAS or us in connection with the fee award. On June 6, 2011, the insurer filed an action against AMICAS, Inc. and Merge in Federal Court in the Northern District of Illinois seeking a declaration that it is not responsible for the

F-9

Merge Healthcare Solutions Inc.

Notes to Condensed Consolidated Financial Statements — (Continued)

$2,500 portion of the judgment rendered in the December 4, 2010 judgment from the Superior Court of Suffolk County, Massachusetts. Merge intends to file a counterclaim seeking a declaration that the insurer must pay the full amount of the Superior Court’s fee award, plus additional damages. Merge intends to seek a dismissal of the insurer’s action. However, an adverse outcome could negatively impact our financial condition.

In August, 2010, Merge Healthcare was sued in the Northern District of Texas by the Court-appointed receiver for Stanford International Bank, Ltd. The receiver alleges that Merge was a recipient of a fraudulent conveyance as a result of a Ponzi scheme orchestrated by Robert Stanford and Stanford International Bank, Ltd. (SIBL). Merge is not alleged to have participated in the Ponzi scheme. The receiver’s claims arise from the failed acquisition of Emageon, Inc. (Emageon) by Health Systems Solutions, Inc. (HSS), an affiliate of SIBL, in February 2009, which resulted in the payment of a $9,000 break-up fee by HSS, which payment is alleged to have been financed by SIBL. Merge subsequently acquired Emageon as part of our AMICAS acquisition. The complaint seeks to recover the $9,000 payment to Emageon, plus interest, costs, and attorneys’ fees. We have retained litigation counsel and intend to vigorously defend this action. We have filed a motion to dismiss the complaint. That motion has been fully briefed, and we are awaiting a decision from the Court. However, an adverse outcome could negatively impact our operating results and financial condition.

In addition to the matters discussed above, the Company is, from time to time, parties to legal proceedings, lawsuits and other claims incident to its business activities. Such matters may include, among other things, assertions of contract breach or intellectual property infringement, claims for indemnity arising in the course of business and claims by persons whose employment has been terminated. Such matters are subject to many uncertainties and outcomes are not predictable. The Company is unable to estimate the ultimate aggregate amount of monetary liability, amounts which may be covered by insurance or recoverable from third parties, or the financial impact with respect to these matters as of the date of this report.

Guarantees

As a result of the acquisition of MHSI, the Company assumed a guarantee to a lender on behalf of a customer. At June 30, 2011, the balance outstanding on the loan was approximately $805. As the customer makes loan payments to the lender, the guarantee is reduced.

(10)   Income Taxes

The Company is subject to tax in multiple jurisdictions and records income tax expense on an interim basis using an estimated annual effective tax rate. The estimated annual effective tax rate is modified to exclude the effect of losses for those jurisdictions where the tax benefit cannot be recognized and a separate estimated annual tax rate is required. Items discrete to a specific quarter are reflected in tax expense for that interim period. A valuation allowance is established when necessary to reduce deferred tax assets to the amount more-likely-than-not to be realized. Further limitations may apply to deferred tax assets if ownership changes occur. There was no material change in unrecognized tax benefits in the six months ended June 30, 2011. The Company does not reasonably expect any significant change in unrecognized tax benefits within the next twelve months.

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Merge Healthcare Solutions Inc.

Notes to Condensed Consolidated Financial Statements — (Continued)

(11)   Earnings Per Share

The following table sets forth the computation of basic and diluted loss per share (“EPS”):

	Six Months
	Ended			Periods Ended
	(Successor			(Successor			(Predecessor
	Company)			Company)			Company)
	June 30,			June 30,			April 27,
	2011			2010			2010
Numerator — net loss:	$	(5,705	)	$	(9,966	)	$	(12,430	)
Denominator:
Basic weighted-average shares outstanding		NM	(1)		NM	(1)		37,010
Effect of dilutive securities		NM	(1)		NM	(1)		—
Diluted weighted-average shares outstanding		NM	(1)		NM	(1)		37,010
Loss per share — basic		NM	(1)		NM	(1)	$	(0.34	)
Loss per share — diluted		NM	(1)		NM	(1)	$	(0.34	)

(1) Amount is not meaningful as a result of the acquisition by Merge

As a result of the acquisition by Merge on April 28, 2010, all existing shares of MHSI were cancelled and 100 new shares were issued to Merge. Due to the small number of shares and the fact that Merge has sole ownership of such shares, the weighted-average shares outstanding and loss per share calculations are not meaningful.

(12)   Recent Accounting Pronouncements

In June 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income. ASU No. 2011-05 amends the FASB Accounting Standards Codification (Codification) to allow an entity the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. ASU No. 2011-05 eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. The amendments to the Codification in the ASU do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. ASU No. 2011-05 will be applied retrospectively and is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. Early adoption is permitted. The Company has not early adopted this ASU. The adoption of this amendment will only impact the presentation of comprehensive income in the Company’s consolidated condensed financial statements.

In May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements. This ASU represents the converged guidance of the FASB and the International Accounting Standards Board (the Boards) on fair value measurement. The collective efforts of the Boards and their staffs, reflected in ASU 2011-04, have resulted in common requirements for measuring fair value and for disclosing information about fair value measurements, including a consistent meaning of the term “fair value.” The Boards have concluded the common requirements will result in greater comparability of fair value measurements presented and disclosed in financial statements

F-11

Merge Healthcare Solutions Inc.

Notes to Condensed Consolidated Financial Statements — (Continued)

prepared in accordance with U.S. GAAP and International Financial Reporting Standards. The amendments to this ASU are to be applied prospectively. ASU No. 2011-04 is effective during interim and annual periods beginning after December 15, 2011. The adoption of this amendment will affect the Company’s disclosures only and will not have a material impact on its statement of operations or financial position.

F-12