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Exhibit 10.12
 
EMPLOYMENT AGREEMENT

This Employment Agreement (“Agreement”) by and between Merge Healthcare,
Incorporated, a Delaware corporation (the "Company"), and Jeffery A. Surges (the
"Executive") dated as of the 5th day of November, 2010 (the “Effective Date”).

The Company has determined that, because of the unique nature of the Executive's
services to the Company, it is in its best interests and those of its
shareholders to assure that the Company will have the continued dedication of
the Executive, and to provide the Company with the continuity of management the
Company considers crucial to ensuring the Company's continued success.
Therefore, in order to accomplish these objectives, the Company desires to enter
into this Agreement.

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

1.             Employment Period. The Company hereby agrees to employ the
Executive, and the Executive hereby agrees to be employed by the Company,
subject to the terms and conditions of this Agreement, for the period commencing
on the Effective Date and ending on November 4, 2012 ("Initial Term"); provided,
on November 5, 2012 and each November 5th thereafter, the employment period
shall be extended for additional one-year periods until the Executive dies or
becomes Disabled, as defined in Section 3(a) herein, or either the Company or
the Executive delivers a written notice of its/his decision not to continue such
employment for a subsequent one-year period (“Notice of Non-Renewal”) at least
60 days before such November 5th (the Initial Term, as so extended, is the
"Employment Period").  The Employment Period shall automatically terminate upon
any termination of Executive’s employment.

2.             Terms of Employment.

(a)           Position and Duties.

(i)           During the Employment Period, (i) the Executive shall serve as the
Chief Executive Officer with such authority, duties and responsibilities as are
commensurate with such position and as may be consistent with such position,
reporting to the Board of Directors of the Company (the “Board”);

(ii)          the Executive's services shall be performed at 200 East Randolph
Street, Chicago, Illinois; and,

(iii)         excluding periods of vacation or sick leave, the Executive shall
devote substantially all of his attention and time during normal business hours
to the business and affairs of the Company.

(b)           Compensation.

(i)           Base Salary. During the Employment Period, the Executive shall
receive an annual base salary ("Annual Base Salary") of $450,000.
 
(ii)          Annual Bonus. For each fiscal year that the Executive is employed
by the Company, the Executive shall be entitled to participate in the Company's
annual incentive bonus plan then in effect (the "Annual Target Bonus").  The
Executive’s Annual Target Bonus shall be equivalent to one hundred percent
(100%) of the Executive’s Annual Base Salary.
 
 
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(iii)         Stock Option Grant. Executive shall be granted 1,500,000 stock
options. The stock options shall vest as follows: twenty percent (20%) or
300,000 options on November 5, 2010 (“Grant Date”) and twenty percent (20%) on
each anniversary of the Grant Date thereafter. These options are non-qualified
and shall expire six (6) years from the Grant Date. All options will vest upon a
change in control of the Company. Notwithstanding the above, the terms and
conditions of the options will be as otherwise set forth in the 2005 Equity Plan
and the stock option award agreement as amended.  In the event that any change
in control payment or benefits received or to be received by Executive pursuant
to this Agreement or any other agreement would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code (the “Code”) or any
comparable successor provisions, then such payment shall be either: (A) provided
to Executive in full, or (B) provided to Executive as to such lesser extent
which would result in no portion of such payment being subject to such excise
tax, whichever of the foregoing amounts, when taking into account applicable
federal, state, local and foreign income and employment taxes, such excise tax,
and any other applicable taxes, results in the receipt by Executive, on an
after-tax basis, of the greatest amount of the payment, notwithstanding that all
or some portion of such payment may be taxable under such excise tax.  To the
extent such payment needs to be reduced pursuant to the preceding sentence,
reductions shall come from taxable amounts before non-taxable amounts and
beginning with the payments otherwise scheduled to occur soonest.  Executive
agrees to cooperate fully with the Company to determine the benefits applicable
under this subparagraph.
 
(iv)        Other Benefits. During the Employment Period, the Executive shall be
entitled to participate in all employee welfare, perquisites, fringe benefit,
vacation and other benefit plans, practices, policies and programs generally
applicable to the senior executives of the Company.
 
(v)         Expenses. During the Employment Period, the Executive shall be
entitled to receive reimbursement for all expenses incurred by the Executive in
accordance with the Company's policies for its senior executives as in effect
from time to time.  To the extent required to avoid an accelerated or additional
tax under Section 409A of the Code and the guidance promulgated thereunder
(collectively “Section 409A”), amounts reimbursable to Executive under this
Agreement shall be paid to Executive on or before the last day of the year
following the year in which the expense was incurred, the amount of expenses
eligible for reimbursement (and in-kind benefits provided to Executive) during
any one year may not effect amounts reimbursable or provided in any subsequent
year, and the right to reimbursement (and in-kind benefits provided to
Executive) under this Agreement shall not be subject to liquidation or exchange
for another benefit.
 
3.             Termination of Employment.
 
(a)           Death or Disability. The Executive's employment shall terminate
automatically upon the Executive's death or Disability during the Employment
Period. “Disability” means the Executive’s inability, due to illness, accident,
injury, physical or mental incapacity or other disability, to carry out
effectively the Executive’s duties and obligations to the Company or any of its
subsidiaries and to participate effectively and actively in the management of
the Company or any of its Subsidiaries for a period of at least ninety (90)
consecutive days or for shorter periods aggregating at least one hundred twenty
(120) days (whether or not consecutive) during any twelve (12) month period.  A
Disability shall be determined in the reasonable judgment of either (i) the
Board or (ii) the Executive or his personal representative or legal guardian,
and shall be deemed to have occurred on (x) the date that such party provides
notice to the other party of the satisfaction of each of the requirements to
constitute a Disability set forth above or (y) such other date as the parties
shall mutually agree (such date, the “Disability Effective Date”).
 
 
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(b)           Cause. The Company may terminate the Executive's employment at any
time for Cause. For purposes of this Agreement, "Cause" shall mean (i) the
willful and continued failure of the Executive to perform substantially the
Executive's duties with the Company or one of its subsidiaries (other than any
such failure resulting from incapacity due to physical or mental illness), after
a written demand for substantial performance is delivered to the Executive by
the Board or its representatives, which specifically identifies the manner in
which the Board believes that the Executive has not substantially performed the
Executive's duties, or (ii) the willful engaging by the Executive in illegal
conduct or gross misconduct that is materially and demonstrably injurious to the
Company or its affiliates, or (iii) the conviction of a felony or entry of a
guilty or nolo contendere plea by the Executive with respect thereto, or (iv) a
material breach of Sections 5(a) through (e) of this Agreement.  For purposes of
this provision, no act or failure to act on the part of the Executive shall be
considered "willful" unless it is done, or omitted to be done, by the Executive
in bad faith or without reasonable belief that the Executive's act or omission
was in the best interests of the Company. Any act, or failure to act, based upon
express authority given pursuant to a resolution duly adopted by the Board with
respect to such act or omission or based upon the advice of counsel for the
Company shall be conclusively presumed to be done, or omitted to be done, by the
Executive in good faith and in the best interests of the Company.  The cessation
of employment of the Executive shall not be deemed to be for Cause unless and
until there shall have been delivered to the Executive a copy of a resolution
duly adopted by the affirmative vote of a majority of the entire membership of
the Board (not including the Executive) after reasonable notice is provided to
the Executive and the Executive is given an opportunity (together with separate
counsel if the Board requests its counsel to be present), to be heard before the
Board, finding that, in the good faith opinion of the Board, the Executive has
engaged in the conduct described in subparagraph (i), (ii), (iii) or (iv) above,
and specifying the particulars thereof in detail.
 
(c)           Good Reason. The Executive's employment may be terminated at any
time by the Executive for Good Reason by Notice of Termination provided to the
Company in accordance with Section 3(c) within ninety (90) days after the
Executive becomes aware of such basis for Good Reason. For purposes of this
Agreement, "Good Reason" shall mean in the absence of a written consent of the
Executive (i) any action by the Company that results in a material diminution in
the Executive's position, authority, duties or responsibilities as contemplated
by Section 2(a) of this Agreement, including for this purpose, without
limitation, actions that relate to the Executive's status, offices, titles and
reporting relationships and excluding for this purpose any action not taken in
bad faith that is remedied by the Company promptly after receipt of notice
thereof given by the Executive; (ii) any failure by the Company to comply with
any of the provisions of Section 2(b) of this Agreement (other than a failure
not occurring in bad faith and which is remedied by the Company promptly after
receipt of notice thereof given by the Executive); (iii) any reduction in the
Executive’s Base Salary or Annual Bonus opportunity (provided, however, that (A)
a reduction in Annual Bonus opportunity shall not trigger the application of
this clause if (1) it similarly applies to all senior executives of the Company
and reflects the Board’s assessment of current or projected reductions in the
nature, scope or profitability of the Company as compared to the prior fiscal
year, or (2) such reduction is part of an overall modification to the Company’s
compensation programs that does not reduce the Executive’s aggregate annual
compensation opportunity by more than fifteen percent (15%) as compared to the
prior fiscal year and (B) the phrase “Annual Bonus opportunity” shall mean the
target bonus set for Executive with respect to a fiscal year and shall not be
considered to have been reduced merely because the actual Annual Bonus paid to
Executive with respect to such year was reduced below such target as part of the
Board’s evaluation of Executive’s performance during such year and such
evaluation has been conducted in good faith by the Board); (iv) the Company
requiring the Executive to be based at any office or location more than fifty
(50) miles from that provided in Section 2(a)(ii) hereof, provided that travel
required in connection with Executive's reporting relationships and
responsibilities to the Board shall not be deemed a breach hereof; and (v) any
failure by the Company to comply with Section 6(b) below.
 
 
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(d)           Notice of Termination. Any termination by the Company for Cause,
or by the Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 7(c) of
this Agreement. For purposes of this Agreement, a "Notice of Termination" means
a written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive's employment under the provision so indicated and (iii) if the
Date of Termination (as defined below) is other than the date of receipt of such
notice, specifies the termination date (which date shall be not more than ninety
days after the giving of such notice). The failure by the Executive or the
Company to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any right of
the Executive or the Company, respectively, hereunder or preclude the Executive
or the Company, respectively, from asserting such fact or circumstance in
enforcing the Executive's or the Company's rights hereunder.  A Notice of
Termination shall also be provided (without a need to reference matters
addressed in clauses (i) and (ii) above) in the event of any termination by the
Company other than for Cause or by the Executive without Good Reason.
 
(e)           Date of Termination. "Date of Termination" means (i) if the
Executive's employment is terminated by the Company, or if the Executive
resigns, the effective date thereof stated in the Notice of Termination or
Notice of Non-Renewal, and (ii) if the Executive's employment is terminated by
reason of death or Disability, the Date of Termination shall be the date of
death of the Executive or the Disability Effective Date, as the case may be.
 
(f)           Effect of Termination.  In the event of any termination of
employment, except as otherwise agreed by the Company, the Executive shall
automatically be deemed to have resigned and shall resign from all positions
with the Company and its affiliates as of the Date of Termination.
 
4.           Obligations of the Company upon Termination.
 
(a)           Good Reason; Other Than for Cause. If the Company shall terminate
the Executive's employment other than for Cause (including by the Company’s
delivery of a Notice of Non-Renewal), or if the Executive shall terminate
employment for Good Reason and provided (in the case of clauses (ii) and (iii)
below) that Executive executes within thirty (30) days after the Executive’s
Date of Termination, and does not revoke, a general release of claims in form
reasonably satisfactory to the Company:
 
(i)           the Company shall pay to the Executive the following sums due in
accordance with the Company’s payroll practices:
 
   (A) the Executive's Annual Base Salary through the Date of Termination; and
 
 
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   (B) the Executive’s actual annual bonus for the prior fiscal year to the
extent not theretofore paid; and
 
(ii)          the Company shall pay, in accordance with the Company’s payroll
practices over twelve (12) calendar months, beginning in the month after the
30th day following Executive’s Date of Termination (or such later date that any
right that the Executive has to revoke his general release shall have lapsed), a
series of equal cash payments equal to the sum of the (A) Executive's Annual
Base Salary, plus (B) fifty percent (50%) of the Executive’s Annual Target
Bonus; and
 
(iii)         the Company shall pay or provide any accrued benefits and shall
continue, for one year after the Executive's Date of Termination,  welfare
benefits to the Executive and/or the Executive's family on terms and conditions
substantially equivalent to those provided to other senior executives of the
Company and their families at such time (which period shall be reduce the
Executive’s COBRA coverage period by the same duration),; and
 
(b)           Cause; Other than for Good Reason. If the Executive's employment
shall be terminated for Cause or the Executive terminates his employment without
Good Reason at any time (including by Executive’s delivery of a Notice of
Non-Renewal), this Agreement shall terminate without further obligations to the
Executive other than the obligation to pay or provide any accrued benefits
pursuant to Section 4(a)(i) above.
 
(c)           Death or Disability. If the Executive's employment is terminated
by reason of the Executive's death or Disability, the Executive shall be
entitled to the benefits set forth in Section 4(a) above (except that Section
4(a)(ii) shall not apply), and this Agreement shall terminate without further
obligations to the Executive's legal representatives under this Agreement.
 
(d)           Full Discharge.  The amounts payable to Executive following
termination of the Employment Period or upon or any actual or constructive
termination of Executive’s employment shall be in full and complete satisfaction
of Executive’s rights under this Agreement and any other claims Executive may
have in respect of Executive’s employment by the Company or any Affiliate, and
Executive acknowledges that such amounts are fair and reasonable, and
Executive’s sole and exclusive remedy, in lieu of all other remedies at law or
in equity, with respect to the termination of Executive’s employment hereunder.
 
(e)           Timing of Payments. Executive agrees if he is a “specified
employee” at the time of his termination of employment and if payments in
connection with such termination of employment are subject to Section 409A and
not otherwise exempt, such payments (and other benefits to the extent
applicable) due Executive at the time of termination of employment shall not be
paid until a date at least six months after the effective date of Executive’s
“separation from service” (as defined in Section 409A).  To the extent this
Agreement is subject to Section 409A, the parties intend this Agreement to be
interpreted so that it is compliant with Section 409A.  In applying Section
409A, the following rules shall apply:
 
(i)           For purposes of applying the exception to Section 409A for
short-term deferrals, each severance pay installment shall be treated as a
separate payment for purposes of Section 409A.  Accordingly, any benefits paid
(i) within 2-½ months of the end of the Company’s taxable year containing
Executive’s Date of Termination, or (ii) within 2-½ months of Executive’s
taxable year containing the Date of Termination shall be exempt from Section
409A and shall be paid as described in this Section 4 without regard to Section
409A.
 
 
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(ii)          To the extent benefits are not exempt from Section 409A under
subparagraph (i) above, if Executive’s severance pay benefit otherwise payable
in the first six months following Executive’s Date of Termination is equal to or
less than the lesser of the amounts described in Treasury Regulation Section
1.409A-1(b)(9)(iii)(A)(1) and (2), such severance benefit shall be exempt from
Section 409A and shall be paid as described in this Section 4 without regard to
Section 409A; and
 
(iii)         Only to the extent a portion of Executive’s severance pay benefit
is not exempt from Section 409A pursuant to subparagraphs (i) or (ii) above,
then, any such remaining severance pay benefits will not be paid to Executive
until the first payroll date of the 7th month following Executive’s Date of
Termination.  Any deferred payments will be paid in a lump sum and shall be
equal to the portion of the severance pay benefit that exceeds the Section 409A
limit.
 
5.             Covenants.
 
(a)           The Executive shall hold in a fiduciary capacity for the benefit
of the Company all secret or confidential information, knowledge or data
relating to the Company or any of its subsidiaries, and their respective
businesses, which shall not be or become public knowledge (other than by acts by
the Executive or representatives of the Executive in violation of this
Agreement), and the customer and client relationships to which the Company will
expose Executive and which Executive will develop on behalf of the Company in
the course of his duties hereunder. The Executive shall not, without the prior
written consent of the Company or as may otherwise be required by law or legal
process (provided the Company has been given notice of and opportunity to
challenge or limit the scope of disclosure purportedly so required), communicate
or divulge any such information, knowledge or data to anyone other than the
Company and those designated by it, except as reasonably necessary in connection
with enforcement of the Executive's right under this Agreement or his defense of
any civil or criminal investigation or proceeding.
 
(b)           While employed by the Company or any of its subsidiaries and for
twelve months after the Executive's termination of employment (the “Restricted
Period”), the Executive will not, directly or indirectly, solicit, hire or
engage any individual for employment by any person or entity other than the
Company or its subsidiaries or hire any person employed by the Company or its
subsidiaries if such person was employed by the Company or its subsidiaries
within twelve (12) months of such hire or engagement (provided, however, that
the employment of any such person solely as a result of a response to a general
solicitation or advertisement shall not constitute a violation of this clause).
 
(c)           During the Restricted Period, Executive agrees not to: (i)
directly or indirectly contact any Customer of Company (or any of its
subsidiaries or affiliates) for the purposes of providing or selling to those
Customers services or products similar to, or competitive with, the services or
products provided by Company; (ii) directly or indirectly transact any business
with any Customer of Company or any of its subsidiaries or affiliates) relating
to services or products similar to, or competitive with, the services or
products provided by Company in the previous twenty-four months to that
Customer. For the purposes of this provision, Customer shall mean (i) any person
or entity to whom Company or any of its subsidiaries or affiliates has provided
services or products at any time in the eighteen (18) month period immediately
prior to the termination of your employment and with which or whom you have had
contact or knowledge of confidential information; or (ii) any entity to whom
Company or any of its subsidiaries or affiliates has submitted a bid, quotation,
estimate, or a response to Request for Proposal (RFP), Request for Tender (RFT),
Expression of Interest (EOI), Request for Quotation (RFQ), at any time in the
twelve (12) month period immediately prior to the termination of your employment
and with which or whom you have had contact or knowledge of confidential
information, regardless of whether such bid, quotation, estimate or response has
been successful or not
 
 
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(d)           During the Restricted Period, Executive agrees not to engage in
executive management or sales activities on behalf of any person or entity
within the United States engaged in the business of developing or marketing
software or other information technology to automate healthcare data and
diagnostic workflow.
 
(e)           During the Restricted Period and for two (2) years after the end
of the Restricted Period, Executive agrees not to make any public statement that
is intended to or could reasonably be expected to disparage the Company or its
subsidiaries or any of their products, services, shareholders, directors,
officers or employees.  During the Restricted Period, the Company agrees that in
its external communications that it shall not make a public statement that is
intended to or could reasonably be expected to disparage Executive
 
(f)           The results and proceeds of Executive’s services to the Company
hereunder, including, without limitation, any works of authorship related to the
Company resulting from Executive’s services during Executive’s employment with
the Company and/or any of its Affiliates and any works in progress, shall be
works-made-for-hire and the Company shall be deemed the sole owner throughout
the universe of any and all rights of whatsoever nature therein, whether or not
now or hereafter known, existing, contemplated, recognized or developed, with
the right to use the same in perpetuity in any manner the Company determines in
its sole discretion without any further payment to Executive whatsoever.  If,
for any reason, any of such results and proceeds shall not legally be a
work-for-hire and/or there are any rights which do not accrue to the Company
under the preceding sentence, then Executive hereby irrevocably assigns and
agrees to assign any and all of Executive’s right, title and interest thereto,
including, without limitation, any and all copyrights, patents, trade secrets,
trademarks and/or other rights of whatsoever nature therein, whether or not now
or hereafter known, existing, contemplated, recognized or developed to the
Company, and the Company shall have the right to use the same in perpetuity
throughout the universe in any manner the Company determines without any further
payment to Executive whatsoever.  Executive shall, from time to time, as may be
requested by the Company and at the Company’s sole expense, do any and all
things which the Company may deem useful or desirable to establish or document
the Company’s exclusive ownership of any an all rights in any such results and
proceeds, including, without limitation, the execution of appropriate copyright
and/or patent applications or assignments.  To the extent Executive has any
rights in the results and proceeds of Executive’s services to the Company that
cannot be assigned in the manner described above, Executive unconditionally and
irrevocably waives the enforcement of such rights.  This Section 5(e) is subject
to, and shall not be deemed to limit, restrict or constitute any waiver by the
Company of any rights of ownership to which the Company may be entitled by
operation of law by virtue of the Company or any of its Affiliates being
Executive’s employer
 
(g)           All documents, records and files, in any media of whatever kind
and description, relating to the business, present or otherwise, of the Company
or any of its Affiliates, and any copies, in whole or in part, thereof (the
"Documents"), whether or not prepared by Executive will be the sole and
exclusive property of the Company. Executive agrees to safeguard all Documents
and to surrender to the Company, at the time Executive’s employment terminates
or at such earlier time or times as the Board or its designee may specify, all
Documents then in Executive’s possession or control.
 
 
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(h)           Executive acknowledges that each of these covenants has a unique,
very substantial and immeasurable value to the Company and its Affiliates, that
Executive has sufficient assets and skills to provide a livelihood while such
covenants remain in force and that, as a result of the foregoing, in the event
that Executive breaches such covenants, monetary damages would be an
insufficient remedy for the Company and equitable enforcement of the covenant
would be proper.  Executive therefore agrees that the Company, in addition to
any other remedies available to it, will be entitled to preliminary and
permanent injunctive relief against any breach by Executive of any of those
covenants, without the necessity of showing actual monetary damages or the
posting of a bond or other security.
 
(i)            Executive agrees to cooperate, in a reasonable and appropriate
manner, with the Company and its attorneys, both during and after the
termination of Executive’s employment, in connection with any litigation or
other proceeding arising out of or relating to matters in which Executive was
involved prior to the termination of Executive’s employment to the extent the
Company pays all Company-approved expenses Executive incurs in connection with
such cooperation and to the extent such cooperation does not unduly interfere
(as determined by Executive in good faith) with Executive’s personal or
professional schedule.
 
(j)            The provisions of this Section 5 shall remain in full force and
effect until the expiration of the period specified herein notwithstanding the
earlier termination of the Executive's employment hereunder.
 
6.             Successors.
 
(a)           This Agreement is personal to the Executive and without the prior
written consent of the Company shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Executive's legal
representatives. This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns.
 
(b)           The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of its business and/or assets to assume expressly and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
As used in this Agreement, "Company" shall mean the Company as hereinbefore
defined and any successor to its business and/or assets as aforesaid which
assumes and agrees to perform this Agreement by operation of law, or otherwise.
 
7.             Miscellaneous.
 
(a)           This Agreement shall be governed by and construed in accordance
with the laws of the State of Illinois, without reference to any state’s
principles of conflict of laws. The parties hereto irrevocably agree to submit
to the jurisdiction and venue of the courts of the State of Illinois, in any
action or proceeding brought with respect to or in connection with this
Agreement. The captions of this Agreement are not part of the provisions hereof
and shall have no force or effect. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.
 
(b)           The term “subsidiary” or “subsidiaries” as used in this Agreement
shall refer to any and all direct and/or indirect subsidiaries of the Company.
 
 
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(c)           All notices and other communications hereunder shall be in writing
and shall be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
 
If to the Executive:
 
At the most recent address on file for the Executive at the Company.
 
If to the Company:
 
Merge Healthcare, Incorporated
200 East Randolph Drive
Chicago, IL  60601
Attention:   Chairman
 
With a copy to the Company's General Counsel at the same address or to such
other address as either party shall have furnished to the other in writing in
accordance herewith. Notice and communications shall be effective when actually
received by the addressee.
 
(d)           AS SPECIFICALLY BARGAINED FOR INDUCEMENT FOR EACH OF THE PARTIES
HERETO TO ENTER INTO THIS AGREEMENT (AFTER HAVING THE OPPORTUNITY TO CONSULT
WITH COUNSEL), EACH PARTY HERETO EXPRESSLY WAIVES THE RIGHT TO TRIAL BY JURY IN
ANY LAWSUIT OR PROCEEDING RELATING TO OR ARISING IN ANY WAY FROM THIS AGREEMENT
OR THE MATTERS CONTEMPLATED HEREBY.
 
(e)           The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
 
(f)            The Company may withhold from any amounts payable under this
Agreement such Federal, state, or local taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
 
(g)           The Executive's or the Company's failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert any
right the Executive or the Company may have hereunder, shall not be deemed to be
a waiver of such provision or right or any other provision or right of this
Agreement.
 
(h)           From and after the Effective Date, this Agreement shall supersede
any other employment, severance or change of control agreement between the
Executive and the Company or any of its subsidiaries.
 
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand and,
pursuant to the authorization from its Board, the Company has caused these
presents to be executed in its name and on its behalf, all as of the day and
year first above written.
 
 
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  Executive                     /s/ Jeffrey A. Surges      Jeffrey A. Surges   
                  Merge Healthcare, Incorporated                   
 
By:
/s/ Michael W. Ferro, Jr.       Title: Chairman  

                                                  
 
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