--------------------------------------------------------------------------------

EXHIBIT 10.20
 
INDEMNIFICATION AGREEMENT
 
THIS INDEMNIFICATION AGREEMENT (this “Agreement”) is made and entered into as of
[                    ], 2015 between Merge Healthcare Incorporated, a Delaware
corporation (the “Company”), and [                    ] (“Indemnitee”).
 
WHEREAS, Indemnitee is either a member of the board of directors of the Company
(the “Board”) or an officer of the Company, or both, and in such capacity or
capacities is performing a valuable service for the Company;
 
WHEREAS, the Company is aware that competent and experienced persons are
increasingly reluctant to serve as directors or officers of corporations or
other business entities unless they are protected by comprehensive
indemnification and liability insurance, due to increased exposure to litigation
costs and risks resulting from their service to such corporations, and because
the exposure frequently bears no reasonable relationship to the compensation of
such directors and officers;
 
WHEREAS, Section 145 of the General Corporation Law of the State of Delaware
(the “DGCL”), under which the Company is organized, empowers the Company to
indemnify by agreement its officers, directors, employees and agents, and
persons who serve, at the request of the Company, as directors, officers,
employees or agents of other corporations or enterprises, and expressly provides
that the indemnification provided by the DGCL is not exclusive;
 
WHEREAS, the Company desires and has requested the Indemnitee to serve or
continue to serve as a director or officer of the Company free from undue
concern for claims for damages arising out of or related to such services to the
Company;
 
WHEREAS, Indemnitee is willing to serve, continue to serve and to take on
additional service for or on behalf of the Company on the condition that he or
she be indemnified as herein provided;
 
WHEREAS, it is intended that Indemnitee shall be paid promptly by the Company
all amounts necessary to effectuate in full the indemnity provided herein; and
 
WHEREAS, this Agreement is a supplement to and in furtherance of the Amended and
Restated Certificate of Incorporation of the Company (the “Charter”) and the
Amended and Restated Bylaws of the Company (the “Bylaws”), and shall not be
deemed a substitute therefor, nor to diminish or abrogate any rights of
Indemnitee thereunder.
 
NOW, THEREFORE, in consideration of Indemnitee’s agreement to serve as a
director or officer from and after the date hereof, the parties hereto agree as
follows:
 
1.                   Indemnity of Indemnitee.  The Company hereby agrees to hold
harmless and indemnify Indemnitee to the fullest extent permitted by applicable
law, as such may be amended from time to time.  In furtherance of the foregoing
indemnification, and without limiting the generality thereof:
 
(a)                 Proceedings Other Than Proceedings by or in the Right of the
Company.  Indemnitee shall be entitled to the rights of indemnification provided
in this Section l(a) if, by reason of Indemnitee’s Corporate Status (as
hereinafter defined), Indemnitee is, or is threatened to be made, a party to or
participant in any Proceeding (as hereinafter defined) other than a Proceeding
by or in the right of the Company.  Pursuant to this Section 1(a), Indemnitee
shall be indemnified against all Liabilities and Expenses (each as hereinafter
defined) actually incurred by or on behalf of Indemnitee in connection with such
Proceeding or any claim, issue or matter therein, if Indemnitee acted in good
faith and in a manner Indemnitee reasonably believed to be in or not opposed to
the best interests of the Company, and, with respect to any criminal Proceeding,
had no reasonable cause to believe Indemnitee’s conduct was unlawful.
 
(b)                 Proceedings by or in the Right of the Company.  Indemnitee
shall be entitled to the rights of indemnification provided in this Section 1(b)
if, by reason of Indemnitee’s Corporate Status, Indemnitee is, or is threatened
to be made, a party to or participant in any Proceeding brought by or in the
right of the Company.  Pursuant to this Section 1(b), Indemnitee shall be
indemnified against all Liabilities and Expenses actually incurred by or on
behalf of Indemnitee in connection with such Proceeding if Indemnitee acted in
good faith and in a manner Indemnitee reasonably believed to be in or not
opposed to the best interests of the Company; provided, however, if applicable
law so provides, no indemnification against such Liabilities or Expenses shall
be made in respect of any claim, issue or matter in such Proceeding as to which
Indemnitee shall have been adjudged to be liable to the Company, unless and to
the extent that the Delaware court shall determine that such indemnification may
be made.
 

--------------------------------------------------------------------------------

(c)                 Indemnification for Expenses of a Party Who is Wholly or
Partly Successful.  Notwithstanding any other provision of this Agreement, to
the extent that Indemnitee is, by reason of Indemnitee’s Corporate Status, a
party to and is successful, on the merits or otherwise, in any Proceeding,
Indemnitee shall be indemnified to the maximum extent permitted by law, as such
may be amended from time to time, against all Expenses actually incurred by or
on behalf of Indemnitee in connection therewith.  If Indemnitee is not wholly
successful in such Proceeding but is successful, on the merits or otherwise, as
to one or more but less than all claims, issues or matters in such Proceeding,
the Company shall indemnify Indemnitee against all Expenses actually incurred by
or on behalf of Indemnitee in connection with each successfully resolved claim,
issue or matter.  For purposes of this Section 1(c) and without limitation, if
any action, suit or proceeding is disposed of or dismissed, on the merits or
otherwise (including a disposition or dismissal without prejudice), without (i)
an adjudication that Indemnitee was liable to the Company, (ii) a plea of guilty
or nolo contendere by Indemnitee, (iii) an adjudication that Indemnitee did not
act in good faith and in a manner Indemnitee reasonably believed to be in or not
opposed to the best interests of the Company, and (iv) with respect to any
criminal proceeding, an adjudication that Indemnitee had reasonable cause to
believe Indemnitee’s conduct was unlawful, Indemnitee shall be considered for
the purposes hereof to have been successful with respect thereto.
 
2.                    Additional Indemnity.  In addition to, and without regard
to any limitations on, the indemnification provided for in Section 1 of this
Agreement, the Company shall and hereby does, to the fullest extent permitted by
applicable law, indemnify and hold harmless Indemnitee against all Liabilities
and Expenses actually incurred by or on behalf of Indemnitee if, by reason of
Indemnitee’s Corporate Status, Indemnitee is, or is threatened to be made, a
party to or participant in any Proceeding (including a Proceeding by or in the
right of the Company), including, without limitation, all liability arising out
of the negligence or active or passive wrongdoing of Indemnitee.  The only
limitation that shall exist upon the Company’s obligations pursuant to this
Agreement, other than those set forth in Section 9 hereof, shall be that the
Company shall not be obligated to make any payment to Indemnitee that is finally
determined (under the procedures, and subject to the presumptions, set forth in
Sections 6 and 7 hereof) to be unlawful.
 
3.                    Contribution.  To the fullest extent permissible under
applicable law, if the indemnification provided for in this Agreement is
unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of
indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee,
whether for Liabilities and/or for Expenses actually incurred, in connection
with any claim relating to a Proceeding under this Agreement, in such proportion
as is deemed fair and reasonable in light of all of the circumstances of such
Proceeding in order to reflect (i) the relative benefits received by the Company
and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to
such Proceeding, and/or (ii) the relative fault of the Company (and its
directors, officers, employees and agents), on the one hand, and Indemnitee, on
the other hand, in connection with such event(s) and/or transaction(s).  To the
fullest extent permitted by applicable law, the Company hereby agrees to fully
indemnify and hold Indemnitee harmless from any claims of contribution which may
be brought by officers, directors, employees, agents or other service providers
of the Company, other than Indemnitee, who may be jointly liable with
Indemnitee.
 
4.                    Indemnification for Expenses of a Witness. 
Notwithstanding any other provision of this Agreement, to the fullest extent
permitted by applicable law and to the extent that Indemnitee is, by reason of
Indemnitee’s Corporate Status, a witness, or is made (or asked) to respond to
discovery requests, in any Proceeding to which Indemnitee is not a party,
Indemnitee shall be indemnified against all Expenses actually incurred by or on
behalf of Indemnitee in connection therewith.
 
5.                   Advancement of Expenses.  Notwithstanding any other
provision of this Agreement, the Company shall advance, to the extent not
prohibited by law, all Expenses incurred by or on behalf of Indemnitee in
connection with any Proceeding by reason of Indemnitee’s Corporate Status within
fifteen (10) days after the receipt by the Company of a statement or statements
from Indemnitee requesting such advance or advances from time to time, whether
prior to or after final disposition of such Proceeding.  Such statement or
statements shall reasonably evidence the Expenses incurred by Indemnitee and
shall, if and to the extent required by the DGCL, include or be preceded or
accompanied by a written undertaking by or on behalf of Indemnitee to repay any
Expenses advanced if it shall ultimately be determined that Indemnitee is not
entitled to be indemnified against such Expenses.  Any advances and undertakings
to repay pursuant to this Section 5 shall be unsecured and interest-free.  In
accordance with Sections 7(d) and 7(e) of this Agreement, advances shall include
any and all Expenses incurred pursuing an action to enforce this right of
advancement, including Expenses incurred preparing and forwarding statements to
the Company to support the advances claimed.
 
2

--------------------------------------------------------------------------------

6.                   Procedures and Presumptions for Determination of
Entitlement to Indemnification.  It is the intent of the parties to this
Agreement to secure for Indemnitee rights of indemnity that are as favorable as
may be permitted under the DGCL and public policy of the State of Delaware. 
Accordingly, the parties agree that the following procedures and presumptions
shall apply in the event of any question as to whether Indemnitee is entitled to
indemnification under this Agreement:
 
(a)                 To obtain indemnification under this Agreement, Indemnitee
shall submit to the Company a written request, including therein or therewith
such documentation and information as is reasonably available to Indemnitee and
is reasonably necessary to determine whether and to what extent Indemnitee is
entitled to indemnification.  The Secretary (or comparable officer) of the
Company shall, promptly upon receipt of such a request for indemnification,
advise the Board in writing that Indemnitee has requested indemnification. 
Notwithstanding the foregoing, any failure of Indemnitee to provide such a
request to the Company, or to provide such a request in a timely fashion, shall
not relieve the Company of any liability that it may have to Indemnitee unless,
and to the extent that, such failure actually and materially prejudices the
interests of the Company.
 
(b)                Upon written request by Indemnitee for indemnification
pursuant to the first sentence of Section 6(a) hereof, a determination with
respect to Indemnitee’s entitlement thereto shall be made in the specific case
by one of the following three methods, which shall be at the election of the
Board: (1) by a majority vote of the Disinterested Directors (as hereinafter
defined), even though less than a quorum, (2) by a committee of Disinterested
Directors designated by a majority vote of the Disinterested Directors, even
though less than a quorum or (3) if there are no Disinterested Directors, or if
the Disinterested Directors so direct, by Independent Counsel in a written
opinion to the Board, a copy of which shall be delivered to Indemnitee;
provided, however, that if a Change in Control has occurred, the determination
with respect to Indemnitee’s entitlement to indemnification shall be made by
Independent Counsel.
 
(c)                In the event the determination of entitlement to
indemnification is to be made by Independent Counsel, the Independent Counsel
shall be selected as provided in this Section 6(c).  If a Change in Control has
not occurred, the Independent Counsel shall be selected by the Board (including
a vote of a majority of the Disinterested Directors if obtainable), and the
Company shall give written notice to the Indemnitee advising Indemnitee of the
identity of the Independent Counsel so selected.  Indemnitee may, within 10 days
after such written notice of selection shall have been given, deliver to the
Company a written objection to such selection; provided, however, that such
objection may be asserted only on the ground that the Independent Counsel so
selected does not meet the requirements of “Independent Counsel” as defined in
Section 12 of this Agreement, and the objection shall set forth with
particularity the factual basis of such assertion.  If a Change in Control has
occurred, the Independent Counsel shall be selected by the Indemnitee (unless
the Indemnitee shall request that such selection be made by the Board, in which
event the preceding sentence shall apply), and the Indemnitee shall give written
notice to the Company advising the Company of the identity of the Independent
Counsel so selected.  The Company may, within 10 days after such written notice
of selection shall have been given, deliver to the Indemnitee a written
objection to such selection; provided, however, that such objection may be
asserted only on the ground that the Independent Counsel so selected does not
meet the requirements of “Independent Counsel” as defined in Section 12 of this
Agreement, and the objection shall set forth with particularity the factual
basis of such assertion.  Absent a proper and timely objection, the Person so
selected shall act as Independent Counsel.  If a written objection is made, the
Independent Counsel selected may not serve as Independent Counsel unless and
until such objection is withdrawn or a court has determined that such objection
is without merit.  If a Change in Control has occurred, the Independent Counsel
shall be selected by the Indemnitee (unless the Indemnitee shall request that
such selection be made by the Board, in which event the preceding sentence shall
apply), and approved by the Board within 20 days after notification by
Indemnitee.  Absent a proper and timely objection, the Person so selected shall
act as Independent Counsel.  If a written objection is made, the Independent
Counsel selected may not serve as Independent Counsel unless and until such
objection is withdrawn or a court has determined that such objection is without
merit.  The Company shall pay any and all reasonable fees and expenses of
Independent Counsel incurred by such Independent Counsel in connection with
acting pursuant to Section 6(b) hereof, and the Company shall pay all reasonable
fees and expenses incident to the procedures of this Section 6(c), regardless of
the manner in which such Independent Counsel was selected or appointed.
 
3

--------------------------------------------------------------------------------

(d)                In making a determination with respect to entitlement to
indemnification hereunder, the Person making such determination shall presume
that Indemnitee is entitled to indemnification under this Agreement.  Anyone
seeking to overcome this presumption shall have the burden of proof and the
burden of persuasion by clear and convincing evidence.  Neither the failure of
the Company (including by its directors, Independent Counsel or stockholders) to
have made a determination prior to the commencement of any action pursuant to
this Agreement that indemnification is proper in the circumstances because
Indemnitee has met the applicable standard of conduct, nor an actual
determination by the Company (including by its directors, Independent Counsel or
stockholders) that Indemnitee has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that Indemnitee has not
met the applicable standard of conduct.
 
(e)                 For purposes of this Agreement, it shall be presumed that
Indemnitee has at all times acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Company.  Anyone seeking to overcome this presumption of good faith shall have
the burden of proof and the burden of persuasion by clear and convincing
evidence.  Without limiting the generality of the foregoing, Indemnitee shall be
deemed to have acted in good faith if Indemnitee’s action that is the subject of
any actual or threatened Proceeding is based on (i) the records or books of
account of the Enterprise (as hereinafter defined), including financial
statements, (ii) information supplied to Indemnitee by the officers of the
Enterprise in the course of their duties, (iii) the advice of legal counsel for
the Enterprise or (iv) information or records given or reports made to the
Enterprise by an independent certified public accountant or by an appraiser or
other expert selected with reasonable care by the Enterprise.  In addition, the
knowledge and/or actions, or failure to act, of any director, officer, agent or
employee of the Enterprise shall not be imputed to Indemnitee for purposes of
determining the right to indemnification under this Agreement.
 
(f)                  If the Person empowered or selected under this Section 6 to
determine whether Indemnitee is entitled to indemnification shall not have made
a determination within thirty (30) days (or in the case of an advancement of
Expenses in accordance with Section 4, fifteen (15) days; provided that
Indemnitee has, if and to the extent required by the DGCL, delivered the
undertaking contemplated in Section 4) after receipt by the Company of the
request therefor, the requisite determination of entitlement to indemnification
shall be deemed to have been made and Indemnitee shall be entitled to such
indemnification absent (i) a misstatement by Indemnitee of a material fact, or
an omission of a material fact necessary to make Indemnitee’s statement not
materially misleading, in connection with the request for indemnification, or
(ii) a prohibition of such indemnification under applicable law, and such right
to indemnification shall be enforceable by Indemnitee in any court of competent
jurisdiction; provided that the foregoing provisions of this Section 6(f) shall
not apply if the determination of entitlement to indemnification is to be made
by the stockholders pursuant to Section 6(b) of this Agreement and if (A) within
fifteen (15) days after receipt by the Company of the request for such
determination, the Board or the Disinterested Directors, if appropriate, resolve
to submit such determination to the stockholders for their consideration at an
annual meeting thereof to be held within sixty (60) days after such receipt and
such determination is made at such stockholders meeting, or (B) a special
meeting of stockholders is called within fifteen (15) days after such receipt
for the purpose of making such determination, such meeting is held for such
purpose within sixty (60) days after having been so called and such
determination is made at such meeting.
 
(g)                Indemnitee shall cooperate with the Person making a
determination with respect to Indemnitee’s entitlement to indemnification
hereunder, including providing to such Person upon reasonable advance request
any documentation or information which is not privileged or otherwise protected
from disclosure and which is reasonably available to Indemnitee and reasonably
necessary to such determination.  Any Expenses incurred by Indemnitee in so
cooperating with the Person making such determination shall be borne by the
Company (irrespective of the determination as to Indemnitee’s entitlement to
indemnification) and the Company hereby indemnifies and agrees to hold
Indemnitee harmless therefrom.
 
(h)                Any Person making a determination as to Indemnitee’s
entitlement to indemnification shall act reasonably and in good faith in making
a determination regarding Indemnitee’s entitlement to indemnification under this
Agreement.
 
(i)                  With respect to any Proceeding as to which Indemnitee
notifies the Company of the commencement thereof the Company will be entitled to
participate therein at its own expense.  The Company, jointly with any other
indemnifying party similarly notified, will be entitled to assume the defense
thereof, with counsel reasonably satisfactory to Indemnitee; provided, however,
that the Company shall not be entitled to assume the defense of any Proceeding
if there has been a Change in Control or if Indemnitee shall have reasonably
concluded that there may be a conflict of interest between the Company and
Indemnitee with respect to such Proceeding.  After the Company provides written
notice to Indemnitee of its election to assume the defense of any Proceeding
pursuant to this Section 6(i), the Company will not be liable to Indemnitee
under this Agreement for any Expenses subsequently incurred by Indemnitee in
connection with the defense thereof, other than reasonable costs of
investigation or otherwise; provided, however, that Indemnitee shall have the
right to employ Indemnitee’s own counsel, but the fees and expenses of such
counsel incurred after notice from the Company of its assumption of the defense
thereof shall be at the expense of Indemnitee unless:
 
4

--------------------------------------------------------------------------------

(i)                 the employment of counsel by Indemnitee has been authorized
by the Company;
 
(ii)               Indemnitee shall have reasonably concluded that counsel
engaged by the Company may not adequately represent Indemnitee due to, among
other things, actual or potential differing interests; or
 
(iii)              the Company shall not in fact have employed counsel to assume
the defense in such Proceeding or shall not in fact have assumed such defense
and be acting in connection therewith with reasonable diligence; in each of
which cases the fees and expenses of such counsel shall be at the expense of the
Company.
 
(j)                  The Company acknowledges that a settlement or other
disposition short of final judgment may be successful if it permits a party to
avoid expense, delay, distraction, disruption and uncertainty.  To the fullest
extent permitted by law, settlement of any Proceeding without any finding of
responsibility, wrongdoing or guilt on the part of Indemnitee with respect to
claims asserted in such Proceeding shall constitute a conclusive determination
that Indemnitee is entitled to indemnification hereunder with respect to such
Proceeding. The Company shall not settle any Proceeding in any manner unless
such settlement (i) provides for a full and final release of all claims against
Indemnitee and (ii) does not impose any penalty (including any admissions of
fault) or limitation on Indemnitee without Indemnitee’s written consent.
 
(k)                 The termination of any Proceeding or of any claim, issue or
matter therein, by judgment, order, settlement or conviction, or upon a plea of
nolo contendere or its equivalent, shall not (except as otherwise expressly
provided in this Agreement) of itself adversely affect the right of Indemnitee
to indemnification or create a presumption that Indemnitee did not act in good
faith and in a manner which Indemnitee reasonably believed to be in or not
opposed to the best interests of the Company or, with respect to any criminal
Proceeding, that Indemnitee had reasonable cause to believe that Indemnitee’s
conduct was unlawful.
 
7.                    Remedies of Indemnitee.
 
(a)                Subject to Section 9, in the event that (i) a determination
is made pursuant to Section 6 of this Agreement that Indemnitee is not entitled
to indemnification under this Agreement, (ii) advancement of Expenses is not
timely made pursuant to Section 5 of this Agreement, (iii) no determination of
entitlement to indemnification is made pursuant to Section 6(b) of this
Agreement within thirty (30) days (or in the case of an advancement of Expenses
in accordance with Section 4, fifteen (10) days; provided that Indemnitee has,
if and to the extent required by the DGCL, delivered the undertaking
contemplated in Section 4) after receipt by the Company of the request for
indemnification, (iv) payment of indemnification is not made pursuant to this
Agreement within ten (10) days after receipt by the Company of a written request
therefor, (v) payment of indemnification is not made within ten (10) days after
a determination has been made that Indemnitee is entitled to indemnification or
such determination is deemed to have been made pursuant to Section 6 of this
Agreement, or (vi) in the event that the Corporation or any other person takes
or threatens to take any action to declare this Agreement void or unenforceable,
or institutes any litigation or other action or Proceeding designed to deny, or
to recover from, Indemnitee, the benefits provided or intended to be provided to
Indemnitee hereunder, then Indemnitee shall be entitled to an adjudication in
any of the state or federal courts in the State of Delaware (the “Delaware
Court”) of Indemnitee’s entitlement to such indemnification, contribution or
advancement of Expenses.  Alternatively, Indemnitee, at Indemnitee’s option, may
seek an award in arbitration to be conducted by a single arbitrator pursuant to
the Commercial Arbitration Rules of the American Arbitration Association. 
Indemnitee shall commence such proceeding seeking an adjudication or an award in
arbitration within 180 days following the date on which Indemnitee first has the
right to commence such proceeding pursuant to this Section 7.  The Company shall
not oppose Indemnitee’s right to seek any such adjudication or award in
arbitration.
 
5

--------------------------------------------------------------------------------

(b)                In the event that a determination shall have been made
pursuant to Section 6(b) of this Agreement that Indemnitee is not entitled to
indemnification, any judicial proceeding commenced pursuant to this Section 7
shall be conducted in all respects as a de novo trial, or arbitration, on the
merits, and Indemnitee shall not be prejudiced by reason of the adverse
determination under Section 6(b).  In any judicial proceeding or arbitration
commenced pursuant to this Section 7, Indemnitee shall be presumed to be
entitled to indemnification under this Agreement and the Company shall have the
burden of proving by clear and convincing evidence that Indemnitee is not
entitled to indemnification or advancement of Expenses, as the case may be, and
the Company may not refer to or introduce into evidence any determination
pursuant to Section 6(b) of this Agreement adverse to Indemnitee for any
purpose.  If Indemnitee commences a judicial proceeding or arbitration pursuant
to this Section 7, Indemnitee shall not be required to reimburse the Company for
any advances pursuant to Section 5 until a final determination is made with
respect to Indemnitee’s entitlement to indemnification (as to which all rights
of appeal have been exhausted or lapsed).
 
(c)                 If a determination shall have been made pursuant to Section
6(b) of this Agreement that Indemnitee is entitled to indemnification, the
Company shall be bound by such determination in any judicial proceeding
commenced pursuant to this Section 7, absent (i) a misstatement by Indemnitee of
a material fact, or an omission of a material fact necessary to make
Indemnitee’s misstatement not materially misleading, in connection with the
application for indemnification, or (ii) a prohibition of such indemnification
under applicable law.
 
(d)                In the event that Indemnitee, pursuant to this Section 7,
seeks a judicial adjudication of Indemnitee’s rights under, or to recover
damages for breach of, this Agreement, or to recover under any directors’ and
officers’ liability insurance policies maintained by the Company, the Company
shall pay on Indemnitee’s behalf, in advance, any and all Expenses actually
incurred by Indemnitee in such judicial adjudication, regardless of whether
Indemnitee ultimately is determined to be entitled to such indemnification,
advancement of Expenses or insurance recovery, to the fullest extent permitted
by applicable law.
 
(e)                The Company shall, to the extent not prohibited by law, be
precluded from asserting in any judicial proceeding or arbitration commenced
pursuant to this Section 7 that the procedures and presumptions of this
Agreement are not valid, binding and enforceable and shall stipulate in any such
court or before any such arbitrator that the Company is bound by all the
provisions of this Agreement.  It is the intent of the Company that, to the
fullest extent permitted by applicable law, Indemnitee not be required to incur
Expenses associated with the interpretation, enforcement or defense of
Indemnitee’s rights under this Agreement by litigation or otherwise because the
cost and expense thereof would substantially detract from the benefits intended
to be extended to Indemnitee hereunder.  The Company shall indemnify Indemnitee
against any and all Expenses and, if requested by Indemnitee, shall advance, to
the extent not prohibited by law and in accordance with Section 5 of this
Agreement, such Expenses to Indemnitee, which are incurred by Indemnitee in
connection with any action brought by Indemnitee for indemnification or advance
of Expenses from the Company under this Agreement or under any directors’ and
officers’ liability insurance policies maintained by the Company.
 
8.                    Non-Exclusivity; Survival of Rights; Insurance; Primacy of
Indemnification; Subrogation.
 
(a)                The rights of indemnification and to receive advancement of
Expenses as provided by this Agreement shall not be deemed exclusive of any
other rights to which Indemnitee may at any time be entitled under applicable
law, the Charter, the Bylaws, any agreement, a vote of stockholders, a
resolution of directors or otherwise, of the Company.  No amendment, alteration
or repeal of this Agreement or of any provision hereof shall limit or restrict
any right of Indemnitee under this Agreement in respect of any action taken or
omitted by Indemnitee in Indemnitee’s Corporate Status prior to such amendment,
alteration or repeal.  To the extent that a change in the DGCL, whether by
statute or judicial decision, permits greater indemnification than would be
afforded currently under the Charter, Bylaws and this Agreement, it is the
intent of the parties hereto that Indemnitee shall enjoy by this Agreement the
greater benefits so afforded by such change.  No right or remedy herein
conferred is intended to be exclusive of any other right or remedy, and every
other right and remedy shall be cumulative and in addition to every other right
and remedy given hereunder or now or hereafter existing at law or in equity or
otherwise.  The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
right or remedy.
 
(b)
6

--------------------------------------------------------------------------------

(i)                 The Company shall, if commercially reasonable, obtain and
maintain in effect during the entire period described in Section 10 for which
the Company is obligated to indemnify Indemnitee under this Agreement, one or
more policies of insurance with reputable insurance companies to provide the
directors and officers of the Company with coverage for losses from wrongful
acts and omissions and to ensure the Company’s performance of its
indemnification obligations under this Agreement (“D&O Insurance”); provided,
that in connection with a Change of Control that occurs prior to  the
termination of the period described in Section 10 for which the Company is
obligated to indemnify Indemnitee, the Company shall instead purchase a six (6)
year pre-paid “tail policy” (a “Tail Policy”) on terms and conditions (in both
amount and scope) providing substantially equivalent benefits to Indemnitee as
the D&O Insurance in effect as of the closing of the Change of Control (the
“Change of Control Closing Date”) with respect to matters arising on or prior to
the earlier of (i) the Change of Control Closing Date and (ii) the date on which
Indemnitee ceased serving as a director, officer or fiduciary of the Company,
any direct or indirect subsidiary of the Company or of any other corporation,
partnership, joint venture, trust or other enterprise at the express written
consent of the Company.
 
(ii)                Indemnitee shall be covered by such D&O Policies (including
any Tail Policy) in accordance with its or their terms to the maximum extent of
the coverage available for any such officer or director under such D&O
Policies.  In all such D&O Policies, Indemnitee shall be named as an insured in
such a manner as to provide Indemnitee with the same rights and benefits as are
accorded to the most favorably insured of the Company’s directors and officers. 
At the time of the receipt of a notice of a claim pursuant to the terms hereof,
the Company shall give prompt notice of the commencement of such proceeding to
the insurers in accordance with the procedures set forth in the respective D&O
Policies.  The Company shall thereafter take all necessary or desirable action
to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a
result of such proceeding in accordance with the terms of such D&O Policies.
 
(c)                In the event of any payment under this Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights of
recovery of Indemnitee, who shall execute all papers required and take all
action necessary to secure such rights, including execution of such documents as
are necessary to enable the Company to bring suit to enforce such rights.
 
(d)               The Company shall not be liable under this Agreement to make
any payment of amounts otherwise indemnifiable hereunder if and to the extent
that Indemnitee has otherwise actually received such payment under any insurance
policy, contract, agreement or otherwise.
 
(e)                The Company’s obligation to indemnify or advance Expenses
hereunder to Indemnitee who is or was serving at the request of the Company as a
director, officer, employee or agent of any other corporation, limited liability
company, partnership, joint venture, trust, employee benefit plan or other
enterprise shall be reduced by any amount Indemnitee has actually received as
indemnification or advancement of Expenses from such other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise.
 
9.                   Exception to Right of Indemnification.  Notwithstanding any
provision in this Agreement, the Company shall not be obligated under this
Agreement to make any indemnity in connection with any claim made against
Indemnitee:
 
(a)                for an accounting of profits made from the purchase and sale
(or sale and purchase) by Indemnitee of securities of the Company within the
meaning of Section 16(b) of the Exchange Act (as hereinafter defined), or
similar provisions of state statutory law or common law; or
 
(b)          for Indemnitee’s reimbursement to the Company of any bonus or other
incentive-based or equity-based compensation or of any profits realized by
Indemnitee from the sale of securities of the Company, in each case as required
under the Exchange Act; or
 
(c)                 in connection with any Proceeding (or any part of any
Proceeding) initiated by Indemnitee, including any Proceeding (or any part of
any Proceeding) initiated by Indemnitee against the Company or its directors,
officers, employees or other indemnitees, unless (i) the Company has joined in
or the Board authorized the Proceeding (or any part of any Proceeding) prior to
its initiation, (ii) the Company provides the indemnification, in its sole
discretion, pursuant to the powers vested in the Company under applicable law,
or (iii) the Proceeding is one to enforce Indemnitee’s rights under this
Agreement, the Charter or the Bylaws.
 
7

--------------------------------------------------------------------------------

10.                 Duration of Agreement.  All agreements and obligations of
the Company contained herein shall continue until and terminate upon the later
of (i) ten (10) years after the date that Indemnitee shall have ceased to serve
as a director or officer of the Company or a director, officer, trustee,
partner, managing member, fiduciary, employee or agent of any other corporation,
limited liability company, partnership, joint venture, trust, employee benefit
plan or other enterprise which Indemnitee served at the request of the Company,
and (ii) two (2) years after the final termination of any Proceeding (including
any rights of appeal thereto) in respect of which Indemnitee is granted rights
of indemnification or advancement of Expenses hereunder and of any Proceeding
commenced by Indemnitee pursuant to Section 7 of this Agreement relating thereto
(including any rights of appeal of any Section 7 Proceeding).
 
11.                Security.  To the extent requested by Indemnitee and approved
by the Board, the Company shall provide security to Indemnitee for the Company’s
obligations hereunder through an irrevocable bank line of credit, funded trust
or other collateral.  Any such security, once provided to Indemnitee, may not be
revoked or released without the prior written consent of Indemnitee.
 
12.                 Definitions.  For purposes of this Agreement:
 
(a)                 “Change in Control” shall be deemed to occur upon the
earliest to occur after the date of this Agreement of any of the following
events:
 
(i)                 Acquisition of Stock by Third Party.  Any Person, other than
Michael W. Ferro, Merrick Venture Management Holdings, LLC, Guggenheim Partners,
LLC or any of their respective affiliates and other than a trustee or other
fiduciary holding securities under an employee benefit plan of the Company or a
corporation owned directly or indirectly by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company,
is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing
more than 50% of the combined voting power of the Company’s then outstanding
securities, unless the change in relative “beneficial ownership” (as defined in
Rule 13d-3 under the Exchange Act) of the Company’s securities by any Person
results solely from a reduction in the aggregate number of outstanding
securities entitled to vote generally in the election of directors;
 
(ii)               Change in Board of Directors.  During any period of two (2)
consecutive years (not including any period prior to the execution of this
Agreement), individuals who at the beginning of such period constitute the
Board, and any new director (other than a director designated by a Person who
has entered into an agreement with the Company to effect a transaction described
in Section 12(a)(i), 12(a)(iii) or 12(a)(iv)) whose election by the Board or
nomination for election by the Company’s stockholders was approved by a vote of
at least a majority of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to constitute at least
a majority of the members of the Board;
 
(iii)              Corporate Transactions.  The effective date of a merger or
consolidation of the Company with any other entity, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior to such merger or consolidation continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than 50% of the combined voting power
of the voting securities of the surviving entity outstanding immediately after
such merger or consolidation and with the power to elect at least a majority of
the board of directors or other governing body of such surviving entity; and
 
(iv)              Liquidation.  The approval by the stockholders of the Company
of a complete liquidation of the Company or an agreement or series of agreements
for the sale or disposition by the Company of all or substantially all of the
Company’s assets, or, if such approval is not required, the decision by the
Board to proceed with such a liquidation, sale, or disposition in one
transaction or a series of related transactions.
 
8

--------------------------------------------------------------------------------

(b)                “Corporate Status” describes the status of a person who is or
was a director, officer, employee, agent or fiduciary of the Company, any direct
or indirect subsidiary of the Company, or of any other corporation, limited
liability company, partnership, joint venture, trust or other enterprise,
including service with respect to an employee benefit plan, that such person is
or was serving at the request of the Company; provided, that any person that
serves as a director, officer, employee, agent or fiduciary of another
corporation, limited liability company, partnership, joint venture, trust or
other enterprise, of at least 50% of whose equity interests are owned by the
Company, shall be conclusively presumed to be serving in such capacity at the
request of the Company.
 
(c)                 “Disinterested Director” means a director of the Company who
is not and was not a party to the Proceeding in respect of which indemnification
is sought by Indemnitee.
 
(d)                “Enterprise” shall mean the Company and any other
corporation, limited liability company, partnership, joint venture, trust,
employee benefit plan or other enterprise that Indemnitee is or was serving at
the express written request of the Company as a director, officer, trustee,
partner, managing member, employee, agent or fiduciary.
 
(e)                 “Exchange Act” shall mean the Securities Exchange Act of
1934, as amended.
 
(f)                 “Expenses” shall include all reasonable documented direct
and indirect costs, including attorneys’ fees, retainers, court costs,
transcript costs, fees of experts and other professionals, witness fees, travel
expenses, duplicating costs, printing and binding costs, telephone charges,
postage, delivery service fees, out-of-pocket expenses and other disbursements
and expenses of the types customarily incurred in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, participating, or
being or preparing to be a witness in a Proceeding, responding to, or objecting
to, a request to provide discovery in any Proceeding, or, to the fullest extent
permitted by applicable law, successfully establishing a right to
indemnification under this Agreement, whether in whole or part.  Expenses also
shall include Expenses incurred in connection with any appeal resulting from any
Proceeding and any federal, state, local or foreign taxes imposed on Indemnitee
as a result of the actual or deemed receipt of any payments under this
Agreement, including without limitation the premium, security for, and other
costs relating to any cost bond, supersede as bond, or other appeal bond or its
equivalent.  Expenses, however, shall not include any Liabilities.
 
(g)                “Independent Counsel” means a law firm, or a member of a law
firm, that is experienced in matters of corporate law and neither presently is,
nor in the past two (2) years has been, retained to represent: (i) the Company
or Indemnitee in any matter material to either such party (other than with
respect to matters concerning Indemnitee under this Agreement, or of other
indemnitees under similar indemnification agreements), or (ii) any other party
to the Proceeding giving rise to a claim for indemnification hereunder. 
Notwithstanding the foregoing, the term “Independent Counsel” shall not include
any Person who, under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing either the Company
or Indemnitee in an action to determine Indemnitee’s rights under this
Agreement.  The Company agrees to pay the reasonable fees and disbursements of
the Independent Counsel referred to above and to fully indemnify such counsel
against any and all expenses, claims, liabilities and damages arising out of or
relating to this Agreement or its engagement pursuant hereto.
 
(h)               “Liabilities” shall mean damages, losses and liabilities of
any type whatsoever, including, but not limited to, any judgments, fines, excise
or other taxes, penalties and amounts paid in settlement (including all interest
assessments and other charges paid or payable in connection with or in respect
of such judgments, fines, excise or other taxes, penalties or amounts paid in
settlement) of any Proceeding.
 
(i)                  “Person” shall have the meaning as set forth in Sections
13(d) and 14(d) of the Exchange Act; provided, however, that Person shall
exclude (i) the Company, (ii) any trustee or other fiduciary holding securities
under an employee benefit plan of the Company, and (iii) any corporation owned,
directly or indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company.
 
(j)                  “Proceeding” includes any actual, threatened, pending or
completed action, suit, arbitration, alternate dispute resolution mechanism,
investigation, inquiry, administrative hearing or any other actual, threatened,
pending or completed proceeding, and any appeal thereof, whether brought by or
in the right of the Company or otherwise and whether civil, criminal,
administrative or investigative, in which Indemnitee was, is or will be involved
as a party or otherwise, by reason of the Corporate Status of Indemnitee, by
reason of any action taken by Indemnitee or of any inaction on Indemnitee’s part
while acting in such Corporate Status, or by reason of the fact that Indemnitee
is or was serving at the request of the Company as a director, officer,
employee, agent or fiduciary of another corporation, partnership, joint venture,
trust or other enterprise; in each case whether or not Indemnitee is acting or
serving in any such capacity at the time any Liability or Expense is incurred
for which indemnification can be provided under this Agreement; including one
pending on or before the date of this Agreement.
 
9

--------------------------------------------------------------------------------

13.                 Severability.  If any provision of this Agreement or the
application of any such provision to any Person or circumstance shall be
declared by any court of competent jurisdiction to be invalid, illegal, void or
unenforceable in any respect, all other provisions of this Agreement, or the
application of such provision to Persons or circumstances other than those as to
which it has been held invalid, illegal, void or unenforceable, shall
nevertheless remain in full force and effect and will in no way be affected,
impaired or invalidated thereby.  Upon such determination that any provision, or
the application of any such provision, is invalid, illegal, void or
unenforceable, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties hereto as closely
as possible to the fullest extent permitted by law in an acceptable manner to
the end that the transactions contemplated hereby are fulfilled to the greatest
extent possible.
 
14.                 Enforcement and Binding Effect.
 
(a)                The Company expressly confirms and agrees that it has entered
into this Agreement and assumed the obligations imposed on it hereby in order to
induce Indemnitee to serve as a director, officer or key employee of the Company
and/or Enterprise, and the Company acknowledges that Indemnitee is relying upon
this Agreement in serving as a director, officer or key employee of the Company
and/or Enterprise.
 
(b)                Without limiting any of the rights of Indemnitee under the
Charter or Bylaws of the Company as they may be amended from time to time, this
Agreement constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements and
understandings, oral, written and implied, between the parties hereto with
respect to the subject matter hereof.
 
(c)                The indemnification and advancement of expenses provided by,
or granted pursuant to, this Agreement shall be binding upon and be enforceable
by the parties hereto and their respective successors and assigns (including any
direct or indirect successor by purchase, merger, consolidation or otherwise to
all or substantially all of the business or assets of the Company), shall
continue as to an Indemnitee who has ceased to be a director, officer, employee
or agent of the Company or of any other Enterprise at the Company’s request, and
shall inure to the benefit of Indemnitee and Indemnitee’s spouse, assigns,
heirs, devisees, executors and administrators and other legal representatives.
 
(d)                The Company shall require and cause any successor (whether
direct or indirect by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform if no such succession had
taken place.
 
(e)                The Company and Indemnitee agree herein that a monetary
remedy for breach of this Agreement, at some later date, may be inadequate,
impracticable and difficult of proof, and further agree that such breach may
cause Indemnitee irreparable harm.  Accordingly, the parties hereto agree that
Indemnitee may enforce this Agreement by seeking injunctive relief and/or
specific performance hereof or other equitable relief, without any necessity of
showing actual damage or irreparable harm, and that by seeking injunctive relief
and/or specific performance or other equitable relief, Indemnitee shall not be
precluded from seeking or obtaining any other relief to which Indemnitee may be
entitled.  The Company and Indemnitee further agree that Indemnitee shall be
entitled to such specific performance and injunctive or other equitable relief,
including temporary restraining orders, preliminary injunctions and permanent
injunctions, without the necessity of posting bonds or other undertaking in
connection therewith.  The Company acknowledges that in the absence of a waiver,
a bond or undertaking may be required of Indemnitee by the court, and the
Company hereby waives any such requirement of such a bond or undertaking.
 
15.                 Modification and Waiver.  No term of this Agreement may be
amended or modified without the prior written consent of each party hereto.  No
provision of this Agreement may be waived except in a writing executed and
delivered by the party against whom such waiver is sought to be enforced.  Any
amendment or waiver effected in accordance with this Section 15 shall be binding
upon the parties hereto.
 
10

--------------------------------------------------------------------------------

16.                 Notice By Indemnitee.  Indemnitee agrees promptly to notify
the Company in writing upon being served with or otherwise receiving any
summons, citation, subpoena, complaint, indictment or other similar document
relating to any Proceeding or matter which may be subject to indemnification
covered hereunder.  The failure to so notify the Company shall not relieve the
Company of any obligation which it may have to Indemnitee under this Agreement
or otherwise unless and only to the extent that such failure or delay materially
prejudices the Company.
 
17.                 Notices.  Unless otherwise provided, any notice or request
required or permitted to be delivered under this Agreement shall be given in
writing and shall be deemed effectively given as hereinafter described (a) if
given by personal delivery, upon actual delivery, (b) if given by facsimile,
email or telecopier, upon receipt of confirmation of a completed transmittal,
(c) if given by mail, upon the earlier of (i) actual receipt of such notice by
the intended recipient or (ii) three (3) business days after such notice is
deposited in first class mail, postage prepaid, and (d) if by an internationally
recognized overnight air courier, one (1) business day after delivery to such
carrier.  All notices shall be addressed to the party to be notified at the
address as follows, or at such other address as such party may designate by ten
(10) days’ advance written notice to the other party:
 
If to the Company:
 
Merge Healthcare Incorporated
350 North Orleans Street
Chicago, IL 60654

Attention: Board of Directors

Facsimile: (312) 565-6870

E-Mail:  Jared.Green@merge.com

With a copy to (which shall not constitute notice to the Company):

Jenner & Block LLP
353 North Clark Street
Chicago, IL 60654

Attention: Mark A. Harris

Jeffrey R. Shuman

Facsimile: (312) 923-8584

E-Mail: mharris@jenner.com

jshuman@jenner.com

If to Indemnitee:

At the address set forth below Indemnitee’s signature hereto

or to such other address as may have been furnished to Indemnitee by the Company
or to the Company by Indemnitee, as the case may be.
 
11

--------------------------------------------------------------------------------

18.                 Counterparts; Electronic Delivery.  This Agreement may be
executed in one or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument.  This
Agreement and any signed agreement or instrument entered into in connection with
this Agreement, and any amendments hereto or thereto, to the extent delivered by
means of a telecopy machine or electronic mail (any such delivery, an
“Electronic Delivery”), shall be treated in all manner and respects as an
original agreement or instrument and shall be considered to have the same
binding legal effect as if it were the original signed version thereof delivered
in person.  At the request of any party hereto or to any such agreement or
instrument, each other party hereto or thereto shall re-execute original forms
thereof and deliver them to all other parties.  No party hereto or to any such
agreement or instrument shall raise (a) the use of Electronic Delivery to
deliver a signature or (b) the fact that any signature or agreement or
instrument was transmitted or communicated through the use of Electronic
Delivery, as a defense to the formation of a contract, and each such party
forever waives any such defense, except to the extent such defense related to
lack of authenticity.
 
19.                 Headings; Interpretation.  All headings and subheadings used
in this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.  The words “include,” “includes” and
“including” will be deemed to be followed by the phrase “without limitation”. 
The meanings given to terms defined herein will be equally applicable to both
the singular and plural forms of such terms.  Whenever the context may require,
any pronoun includes the corresponding masculine, feminine and neuter forms. 
All references to “dollars” or “$” will be deemed references to the lawful money
of the United States of America.  Further, the parties hereto have participated
jointly in the negotiation and drafting of this Agreement.  In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto, and no presumption or
burden of proof shall arise favoring or disfavoring any party hereto by virtue
of the authorship of any provisions of this Agreement.
 
20.                Governing Law; CONSENT TO JURISDICTION.  This Agreement and
the legal relations among the parties shall be governed by, and construed and
enforced in accordance with, the laws of the State of Delaware, without regard
to its conflict-of-laws rules.  Except with respect to any arbitration commenced
by Indemnitee pursuant to Section 7 of this Agreement, the Company and
Indemnitee hereby irrevocably and unconditionally (i) agree that any action or
proceeding arising out of or in connection with this Agreement shall be brought
only in the Delaware Court, and not in any other state or federal court in the
United States of America or any court in any other country, (ii) consent to
submit to the exclusive jurisdiction of the Delaware Court for purposes of any
action or proceeding arising out of or in connection with this Agreement, (iii)
agree that service of process in any such action or proceeding may be effected
by notice given pursuant to Section 17 of this Agreement, (iv) waive any
objection to the laying of venue of any such action or proceeding in the
Delaware Court, and (v) waive, and agree not to plead or to make, any claim that
any such action or proceeding brought in the Delaware Court has been brought in
an improper or inconvenient forum.  The foregoing consent to jurisdiction shall
not constitute general consent to service of process in the state for any
purpose except as provided above, and shall not be deemed to confer rights on
any Person other than the parties to this Agreement.
 
[Signature page follows]
 
12

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of
the day and year first written above.
 

 
MERGE HEALTHCARE INCORPORATED
       
By:
   
Name:
 
Title:
       
INDEMNITEE
              
Name:
       
Address:
                       

 
 

--------------------------------------------------------------------------------