Document:

ex10_2.htm

    
      
        

      

    

    EXHIBIT
10.2

    

    Optimal
Group Inc.

    2 Place
Alexis Nihon

    3500 de
Maisonneuve Blvd. W.

    Suite
800

    Montreal,
QC H3Z 3C1

    

    LETTER
AGREEMENT

    

    Reference
is made to the Executive Employment Agreement between Optimal Group Inc. and the
undersigned, Holden Ostrin, dated March 5, 2004 (the “2004 Agreement”). All
terms used hereinafter as defined terms shall, unless otherwise herein defined,
have the meanings respectively ascribed thereto in the 2004
Agreement.

    

    Whereas
the current economic climate has provoked a desire by the Corporation to
implement certain temporary measures intended to reduce costs and whereas the
Executive wishes to cooperate in that regard, as follows.

    

    The
Executive hereby agrees that the portion of the current gross amount of Base
Salary (the “Current Amount”) that is payable in bi-weekly installments in
accordance with the payroll practice of the Corporation shall be reduced by 30%,
with effect from, and in respect of the pay period beginning, June 22, 2009,
until such time as the Executive shall notify the Corporation by simple notice
in writing that the said reduction shall be rescinded, from and after which time
the portion of the amount of Base Salary that is payable in bi-weekly
installments in accordance with the payroll practice of the Corporation shall
revert to the Current Amount (the period while such reduction is in effect being
the “Reduction Period”) and shall take effect on the payroll period immediately
following the date at which such notice is provided by the
Executive.

    

    Notwithstanding
this Letter Agreement, for the purpose of the 2004 Agreement, the portion of the
Base Salary that is payable in bi-weekly installments in accordance with the
payroll practice of the Corporation, shall at all times, be and remain equal to
the Current Amount.

    

    Notwithstanding
the generality of the foregoing, the parties agree that in the event of (i) a
Change of Control, (ii) the termination of the Executive’s employment by the
Corporation without Cause, or (iii) the termination of the Executive’s
employment by the Executive for Good Reason, at any time prior to the first
anniversary of the date hereof, the said 30% reduction shall be void ab initio, in which event the
Corporation shall pay to the Executive in one lump sum, upon the occurrence of
such Change of Control or within 10 days of the termination of his employment,
as the case may be (but without in any way limiting any of the Executive’s
rights under the 2004 Agreement or otherwise, upon termination of his
employment), without interest, the aggregate amount by which the Base Salary was
reduced during the Reduction Period, less any statutory deductions at
source.

    

    The
parties agree that the 2004 Agreement, as amended hereby, remains in full force
and effect.

    

    The
parties declare that they have required that this agreement and all documents
relating hereto, either present or future, be drawn in the English language;
Les parties déclarent par les
présentes qu’ils exigent que cette entente et tous les documents y afférents,
soient, pour le présent ou le future, rédigés dans la langue
anglaise.

    

    

    DATED at
Montreal, as of the 2nd day of July 2009.

    

    

    /s/ Holden
Ostrin

    Holden L.
Ostrin

    

    

    ACCEPTED
AND AGREED

    as of the
2nd day of July 2009

    

    

    Optimal
Group Inc.

    

    

    
      	
              Per:

            	
              /s/ Neil Wechsler

            
	 
      	
              Neil
      S. WechslerUnassociated Document

    
      
        

      

    

    EXHIBIT
10.3

    

    Optimal
Group Inc.

    2 Place
Alexis Nihon

    3500 de
Maisonneuve Blvd. W.

    Suite
800

    Montreal,
QC H3Z 3C1

    

    LETTER
AGREEMENT

    

    Reference
is made to the Executive Employment Agreement between Optimal Group Inc. and the
undersigned, Gary Wechsler, dated March 5, 2004 (the “2004 Agreement”). All
terms used hereinafter as defined terms shall, unless otherwise herein defined,
have the meanings respectively ascribed thereto in the 2004
Agreement.

    

    Whereas
the current economic climate has provoked a desire by the Corporation to
implement certain temporary measures intended to reduce costs and whereas the
Executive wishes to cooperate in that regard, as follows.

    

    The
Executive hereby agrees that the portion of the current gross amount of Base
Salary (the “Current Amount”) that is payable in bi-weekly installments in
accordance with the payroll practice of the Corporation shall be reduced by 30%,
with effect from, and in respect of the pay period beginning, June 22, 2009,
until such time as the Executive shall notify the Corporation by simple notice
in writing that the said reduction shall be rescinded, from and after which time
the portion of the amount of Base Salary that is payable in bi-weekly
installments in accordance with the payroll practice of the Corporation shall
revert to the Current Amount (the period while such reduction is in effect being
the “Reduction Period”) and shall take effect on the payroll period immediately
following the date at which such notice is provided by the
Executive.

    

    Notwithstanding
this Letter Agreement, for the purpose of the 2004 Agreement, the portion of the
Base Salary that is payable in bi-weekly installments in accordance with the
payroll practice of the Corporation, shall at all times, be and remain equal to
the Current Amount.

    

    Notwithstanding
the generality of the foregoing, the parties agree that in the event of (i) a
Change of Control, (ii) the termination of the Executive’s employment by the
Corporation without Cause, or (iii) the termination of the Executive’s
employment by the Executive for Good Reason, at any time prior to the first
anniversary of the date hereof, the said 30% reduction shall be void ab initio, in which event the
Corporation shall pay to the Executive in one lump sum, upon the occurrence of
such Change of Control or within 10 days of the termination of his employment,
as the case may be (but without in any way limiting any of the Executive’s
rights under the 2004 Agreement or otherwise, upon termination of his
employment), without interest, the aggregate amount by which the Base Salary was
reduced during the Reduction Period, less any statutory deductions at
source.

    

    The
parties agree that the 2004 Agreement, as amended hereby, remains in full force
and effect.

    

    The
parties declare that they have required that this agreement and all documents
relating hereto, either present or future, be drawn in the English language;
Les parties déclarent par les
présentes qu’ils exigent que cette entente et tous les documents y afférents,
soient, pour le présent ou le future, rédigés dans la langue
anglaise.

    

    

    DATED at
Montreal, as of the 2nd day of July 2009.

    

    

    /s/ Gary
Wechsler

    Gary S.
Wechsler

    

    

    ACCEPTED
AND AGREED

    as of the
2nd day of July 2009

    

    

    Optimal
Group Inc.

    

    

    
      	
              Per:

            	
              /s/ Holden Ostrin

            
	 
      	
              Holden
      L. Ostrinex10_1.htm

    
      

    

    Exhibit 10.1

     

    PLACEMENT
AGENCY AGREEMENT

     

    November
13, 2009

     

    William
Blair & Company, L.L.C.

    222 West
Adams

    Chicago,
IL 60606

    

    Craig-Hallum
Capital Group LLC

    222 South
Ninth Street, Suite 350

    Minneapolis,
MN 55402

    

    Robert W.
Baird & Co. Incorporated

    777 East
Wisconsin Avenue

    Milwaukee,
WI 53202

    

    Ladies
and Gentlemen:

     

    Merge
Healthcare Incorporated, a Delaware corporation (the “Company”), proposes, subject
to the terms and conditions herein, to issue and sell an aggregate of up to
9,084,032 shares (the “Shares”) of its common stock,
$0.01 par value per share (the “Common Stock”), to certain
investors (each an “Investor” and collectively,
the “Investors”), in an
offering under its registration statement on Form S-3 (Registration
No. 333-161691).  The Shares are more fully described in the
Prospectus (as defined in Section 2(a)(iii)
hereof).  The Company desires to engage William Blair & Company,
L.L.C., Craig-Hallum Capital Group LLC and Robert W. Baird & Co.
Incorporated in connection with such issuance and sale of the
Shares.

     

    The
Company hereby confirms its agreement with you as follows:

     

    
      	
              Section
    1.

            	
              Agreement to Act as Placement
      Agents.

            

    

     

    (a)           On
the basis of the representations, warranties and agreements of the Company
herein contained, and subject to all the terms and conditions of this Placement
Agency Agreement (this “Agreement”) between the
Company and each of you, William Blair & Company, L.L.C. shall be the
Company’s sole lead placement agent and Craig-Hallum Capital Group LLC and
Robert W. Baird & Co. Incorporated shall be the Company’s co-placement
agents (in such respective capacities, the “Placement Agents”), on a
reasonable best efforts basis, in connection with the issuance and sale by the
Company of the Securities to the Investors in a proposed takedown under the
Registration Statement (as defined in Section 2(a)(1)
hereof), with the terms of the offering to be subject to market conditions and
negotiations between the Company, the Placement Agents and the prospective
Investors (such takedown shall be referred to herein as the “Offering”).  As
compensation for services rendered, and provided that any of the Shares are sold
to Investors in the Offering, on the Closing Date (as defined in subsection (d) of
this Section 1)
of the Offering, the Company shall pay to the Placement Agents, collectively, an
amount equal to 6% of the gross proceeds received by the Company from the sale
of the Shares (the “Placement
Fee”).  The Placement Fee shall be allocated between the
Placement Agents as they may agree.  The sale of the Shares shall be
made pursuant to subscription agreements in the form included as Exhibit A hereto
(each, a “Subscription
Agreement” and collectively, the “Subscription Agreements”) on
the terms described on Exhibit B
hereto.  The Company shall have the sole right to accept offers to
purchase the Shares and may reject any such offer in whole or in
part.  Notwithstanding the foregoing, it is understood and agreed that
the Placement Agents or any of their respective affiliates may, solely at their
discretion and without any obligation to do so, purchase Shares as principal;
provided, however, that
any such purchases by the Placement Agents (or their respective affiliates)
shall be fully disclosed to the Company and approved by the Company in
accordance with the previous sentence.

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    (b)           This
Agreement shall not give rise to any commitment by the Placement Agents to
purchase any of the Shares, and the Placement Agents shall have no authority to
bind the Company to accept offers to purchase the Shares.  The
Placement Agents shall act on a reasonable best efforts basis and do not
guarantee that they will be able to raise new capital in the
Offering.  The Placement Agents may retain other brokers or dealers to
act as sub-agents on their behalf in connection with the Offering, the fees of
which shall be paid out of the Placement Fee.  Prior to the earlier of
(i) the date on which this Agreement is terminated and (ii) the Closing Date,
the Company shall not, without the prior written consent of the Placement
Agents, solicit or accept offers to purchase securities of the Company (other
than pursuant to the exercise of options or warrants to purchase shares of
Common Stock that are outstanding at the date hereof) otherwise than through the
Placement Agents in accordance herewith.

     

    (c)           The
Company acknowledges and agrees that the Placement Agents shall act as
independent contractors, and not as fiduciaries, and any duties of the Placement
Agents with respect to providing investment banking services to the Company,
including the offering of the Shares contemplated hereby (including in
connection with determining the terms of the Offering), shall be contractual in
nature, as expressly set forth herein, and shall be owed solely to the
Company.  Each party hereto disclaims any intention to impose any
fiduciary or similar duty on any other party hereto. Additionally, the Placement
Agents have not advised, nor are advising, the Company or any other person as to
any legal, tax, investment, accounting or regulatory matters in any jurisdiction
with respect to the transactions contemplated hereby.  The Company
shall consult with its own advisors concerning such matters and shall be
responsible for making its own independent investigation and appraisal of the
transactions contemplated hereby, and the Placement Agents shall have no
responsibility or liability to the Company with respect thereto.  Any
review by the Placement Agents of the Company, the transactions contemplated
hereby or other matters relating to such transactions has been and will be
performed solely for the benefit of the Placement Agents and has not been and
shall not be performed on behalf of the Company or any other
person.  It is understood that the Placement Agents have not and will
not be rendering an opinion to the Company as to the fairness of the terms of
the Offering. Notwithstanding anything in this Agreement to the contrary, the
Company acknowledges that the Placement Agents may have financial interests in
the success of the Offering contemplated hereby that are not limited to the
Placement Fee.  The Company hereby waives and releases, to the fullest
extent permitted by law, any claims that the Company may have against the
Placement Agents with respect to any breach or alleged breach of fiduciary
duty.

     

    (d)           Payment
of the purchase price for, and delivery of, the Shares shall be made at a
closing (the “Closing”)
at the offices of Lowenstein Sandler PC, counsel for the Placement Agents,
located at 65 Livingston Avenue, Roseland, NJ  07068 at 10:00 a.m.,
local time, as soon as practicable after the determination of the public
offering price of the Shares, but not later than on November 18, 2009 (such date
of payment and delivery being herein called the “Closing
Date”).  All such actions taken at the Closing shall be deemed
to have occurred simultaneously.  No Shares which the Company has
agreed to sell pursuant to this Agreement and the Subscription Agreements shall
be deemed to have been purchased and paid for, or sold by the Company, until
such Shares shall have been delivered to the Investor thereof against payment
therefore by such Investor.  If the Company shall default in its
obligations to deliver Shares to an Investor whose offer it has accepted, the
Company shall indemnify and hold the Placement Agents harmless against any loss,
claim or damage incurred by the Placement Agents arising from or as a result of
such default by the Company.

     

    (e)           At
or prior to the Closing, each Investor shall pay by wire transfer of immediately
available funds to an account specified by the Company an amount equal to the
product of (x) the number of Shares such Investor has agreed to purchase and (y)
the purchase price per unit as set forth on the cover page of the Prospectus
(the “Purchase
Amount”).  On the Closing Date, the Company shall (i) deliver
or cause to be delivered the Shares to the Investors, with the delivery of the
Shares to be made, if possible, through the facilities of The Depository Trust
Company’s DWAC system, and (ii) pay to the Placement Agents (A) the Placement
Fee as directed by the Placement Agents and (B) the expense reimbursement to
which the Placement Agents are entitled pursuant to Section 4
hereof.

     

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

    (f)           The
Shares shall be registered in such names and in such denominations as the
Placement Agents shall request by written notice to the Company.

     

    
      	
              Section
    2.

            	
              Representations, Warranties and
      Agreements of the Company.

            

    

     

    The
Company hereby represents, warrants and covenants to the Placement Agents as of
the date hereof, and as of the Closing Date of the Offering, as
follows:

     

    (a)             Registration Statement.
(i)  The Company has prepared and filed with the Securities and
Exchange Commission (the “Commission”) a registration
statement on Form S-3 (File No. 333-161691) under the Securities Act of 1933, as
amended (collectively with the rules and regulations promulgated thereunder, the
“Securities Act”), and
such amendments to such registration statement as may have been required to the
date of this Agreement.  Such registration statement has been declared
effective by the Commission.  Each part of such registration
statement, at any given time, including amendments thereto at such time, the
exhibits and any schedules thereto at such time, the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Securities Act at
such time and the documents and information otherwise deemed to be a part
thereof or included therein by Rule 430A, 430B or 430C under the Securities Act
or otherwise pursuant to the Securities Act at such time, is herein called the
“Registration
Statement.”  Any registration statement filed by the Company
pursuant to Rule 462(b) under the Securities Act is called the “Rule 462(b) Registration
Statement” and, from and after the date and time of filing of the Rule
462(b) Registration Statement, the term “Registration Statement” shall
include the Rule 462(b) Registration Statement.  The Company and the
transactions contemplated by this Agreement meet the requirements and comply
with the conditions for the use of Form S-3 under the Securities
Act.  The offering of the Shares by the Company complies with the
applicable requirements of Rule 415 under the Securities Act.  The
Company has complied with all requests of the Commission for additional or
supplemental information.

     

    (ii)  No
stop order preventing or suspending use of the Registration Statement, any
Preliminary Prospectus (as defined in subsection (a)(iii)
of this Section
2) or the Prospectus or the effectiveness of the Registration Statement,
has been issued by the Commission, and no proceedings for such purpose have been
instituted or, to the Company’s knowledge, are contemplated or threatened by the
Commission.

     

    (iii)  The
Company proposes to file with the Commission pursuant to Rule 424 under the
Securities Act a final prospectus supplement relating to the Shares to a form of
prospectus included in the Registration Statement relating to the Shares in the
form heretofore delivered to the Placement Agents.  Such prospectus
included in the Registration Statement at the time it was declared effective by
the Commission or in the form in which it has been most recently filed with the
Commission on or prior to the date of this Agreement is hereinafter called the
“Base
Prospectus.”  Such prospectus supplement, in the form in which
it shall be filed with the Commission pursuant to Rule 424(b) (including the
Base Prospectus as so supplemented) is hereinafter called the “Prospectus.”  Any
preliminary form of prospectus which is filed or used prior to filing of the
Prospectus is hereinafter called a “Preliminary
Prospectus.”  Any reference herein to the Base Prospectus, any
Preliminary Prospectus  or  the Prospectus or to any
amendment or supplement to any of the foregoing shall be deemed to include any
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the Securities Act as of the date of such prospectus, and, in the case of
any reference herein to the Prospectus, also shall be deemed to include any
documents incorporated by reference therein, and any supplements or amendments
thereto, filed with the Commission after the date of filing of the Prospectus
pursuant to Rule 424(b) under the Securities Act, and prior to the termination
of the offering of the Shares by the Placement Agents.

     

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

    (iv)  For
purposes of this Agreement, all references to the Registration Statement, the
Base Prospectus, any Preliminary Prospectus, the Prospectus or any amendment or
supplement to any of the foregoing shall be deemed to include the copy filed
with the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval System (“EDGAR”).  All
references in this Agreement to amendments or supplements to the Registration
Statement, the Base Prospectus, any Preliminary Prospectus or the Prospectus
shall be deemed to mean and include the subsequent filing of any document under
the Securities Exchange Act of 1934, as amended (collectively with the rules and
regulations promulgated thereunder, the “Exchange Act”), and which is
deemed to be incorporated by reference therein or otherwise deemed to be a part
thereof.

    

    (b)           Compliance with Registration
Requirements.  As of the time of filing of the Registration
Statement or any post-effective amendment thereto, at the time it became
effective (including each deemed effective date with respect to the Placement
Agents pursuant to Rule 430B under the Securities Act) and as of the Closing
Date, the Registration Statement complied and will comply, in all material
respects, with the requirements of the Securities Act and did not and will not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading. Each Preliminary Prospectus and the Prospectus, at the time of
filing or the time of first use and as of the Closing Date, complied and will
comply, in all material respects, with the requirements of the Securities Act
and did not and will not contain an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading; provided, that the Company
makes no representations or warranty in this paragraph with respect to any
Placement Agent Information (as defined in Section
7).

     

    (c)           Disclosure
Package.  As of the Time of Sale (as defined below) and as of
the Closing Date, neither (A) the Issuer General Free Writing Prospectus(es) (as
defined below) issued at or prior to the Time of Sale, any Preliminary
Prospectus (as amended or supplemented as of the Time of Sale), and the
information included on Exhibits B hereto,
all considered together (collectively, the “Disclosure Package”), nor
(B) any individual Issuer Limited-Use Free Writing Prospectus (as defined
below), when considered together with the Disclosure Package, included or will
include any untrue statement of a material fact or omitted or will omit to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided, that the Company
makes no representations or warranty in this paragraph with respect to any
Placement Agent Information.  No statement of material fact included
in the Prospectus has been omitted from the Disclosure Package and no statement
of material fact included in the Disclosure Package that is required to be
included in the Prospectus has been omitted therefrom.  As used in
this paragraph and elsewhere in this Agreement:

     

    (1)           “Time of Sale” with respect
to an Investor means the time of receipt and acceptance of an executed
Subscription Agreement from such Investor.

    

    (2)           “Issuer Free Writing
Prospectus” means any “issuer free writing prospectus,” as defined in
Rule 433 under the Securities Act (“Rule 433”), relating to the
Shares in the form filed or required to be filed with the Commission or, if not
required to be filed, in the form retained in the Company’s records pursuant to
Rule 433(g) under the Securities Act.

    

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

    (3)           “Issuer General Free Writing
Prospectus” means any Issuer Free Writing Prospectus that is intended for
general distribution to prospective investors as identified on Schedule I hereto,
and does not include a “bona fide electronic road show” as defined in Rule
433.

    

    (4)           “Issuer Limited-Use Free Writing
Prospectus” means any Issuer Free Writing Prospectus that is not an
Issuer General Free Writing Prospectus, including any “bona fide electronic road
show” as defined in Rule 433, that is made available without restriction
pursuant to Rule 433(d)(8)(ii), even though not required to be filed with the
Commission.

    

    (d)           Conflict with Registration
Statement.  Each Issuer Free Writing Prospectus, as of its
issue date and at all subsequent times through the completion of the offering
and sale of the Shares or until any earlier date that the Company notified or
notifies the Placement Agents, did not, does not and will not include any
information that conflicted, conflicts or will conflict with the information
contained in the Registration Statement or the Prospectus including any document
incorporated by reference therein and any prospectus supplement deemed to be a
part thereof that has not been superseded or modified; provided, that the
Company makes no representations or warranty in this paragraph with respect to
any Placement Agent Information.

     

    (e)           Distributed Materials. 
The Company has not, directly or indirectly, distributed and will not distribute
any prospectus or other offering material in connection with the offering and
sale of the Shares other than the Disclosure Package or the Prospectus, and
other materials, if any, permitted under the Securities Act to be distributed
and consistent with Section 3(d) below.
The Company will file with the Commission all Issuer Free Writing Prospectuses
in the time required under Rule 433(d) under the Securities Act. The Company has
satisfied or will satisfy the conditions in Rule 433 under the Securities Act to
avoid a requirement to file with the Commission any electronic road show. The
parties hereto agree and understand that the content of any and all “road shows”
related to the offering of the Shares contemplated hereby is solely the property
of the Company.

     

    (f)           Not an Ineligible
Issuer.  (1) At the time of filing the Registration Statement
and (2) at the date hereof and at the Closing Date, the Company was not, is not
and will not be an “ineligible issuer,” as defined in Rule 405 under the
Securities Act, without taking account of any determination by the Commission
pursuant to Rule 405 that it is not necessary that the Company be considered an
ineligible issuer including, without limitation, for purposes of Rules 164 and
433 under the Securities Act with respect to the offering of the Shares as
contemplated by the Registration Statement.

     

    (g)           Incorporated
Documents.  The documents incorporated by reference in the
Disclosure Package and in the Prospectus, when they became effective or were
filed with the Commission, as the case may be, conformed in all material
respects to the requirements of the Securities Act or the Exchange Act, as
applicable, and were filed on a timely basis with the Commission and none of
such documents contained an untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.

     

    (h)           Due
Incorporation.  The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the State
of Delaware, with the corporate power and authority to own its properties and to
conduct its business as currently being carried on and as described in the
Registration Statement, the Disclosure Package and the
Prospectus.  The Company is duly qualified to transact business as a
foreign corporation and is in good standing under the laws of each other
jurisdiction in which its ownership or leasing of property or the conduct of its
business requires such qualification, except where the failure to be so
qualified and in good standing would not, individually or in the aggregate,
result in any material adverse effect upon, or material adverse change in, the
business, operations, prospects, properties, financial condition, or results of
operations of the Company and the Subsidiaries (as defined below) taken as a
whole (a “Material Adverse
Effect”).  The Company is duly qualified to transact business
as a foreign corporation and is in good standing in each jurisdiction in which
the conduct of its business or its ownership, leasing or operation of property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not result in a Material Adverse
Effect.

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

    (i)           Subsidiaries.  Each
subsidiary of the Company (individually, a “Subsidiary” and
collectively, the “Subsidiaries”) has been duly
incorporated or organized, is validly existing as a corporation or other legal
entity in good standing (or the foreign equivalent thereof) under the laws of
the jurisdiction of its incorporation or organization, has the corporate power
and authority to own its properties and to conduct its business as currently
being carried on and as described in the Registration Statement, the Disclosure
Package and the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business or its
ownership, leasing or operation of property requires such qualification, except
to the extent that the failure to be so qualified or be in good standing would
not result in a Material Adverse Effect.  All of the issued and
outstanding shares of capital stock or other equity interests of each Subsidiary
of the Company have been duly and validly authorized and issued, are fully paid
and non-assessable and, except as otherwise described in the Registration
Statement, the Disclosure Package and in the Prospectus, are owned directly by
the Company or through its wholly-owned subsidiaries, free and clear of all
liens, encumbrances, equities or claims.  There is no outstanding
option, right or agreement of any kind relating to the issuance, sale or
transfer of any capital stock or other equity securities of the Subsidiaries to
any person or entity except the Company, and none of the outstanding shares of
capital stock or other equity interests of any Subsidiary was issued in
violation of any preemptive or other rights to subscribe for or to purchase or
acquire any securities of any of the Subsidiaries. Except for its Subsidiaries,
the Company owns no beneficial interest, directly or indirectly, in any
corporation, partnership, joint venture or other business entity.  The
Company has no “significant subsidiaries” (as such term is defined in Rule
1-02(w) of Regulation S-X promulgated by the Commission) other than the
following Subsidiaries: Merge eClinical Inc., Merge CAD Inc., Cedara Software
Corp., Merge eMed, Inc., and Merge Healthcare Incorporated (each a “Significant Subsidiary,” and
collectively, the “Significant
Subsidiaries”).

     

    (j)           Capitalization.  The
Company has duly and validly authorized capital stock as set forth in each of
the Registration Statement, Disclosure Package and Prospectus; all outstanding
shares of Common Stock of the Company conform, or when issued will conform, to
the description thereof in the Registration Statement, the Disclosure Package
and the Prospectus and have been, or, when issued and paid for in the manner
described herein will be, duly authorized, validly issued, fully paid and
non-assessable; and except as disclosed in the Registration Statement, the
Disclosure Package and the Prospectus, the issuance of the Shares to be
purchased from the Company hereunder is not subject to preemptive or other
similar rights, or any restriction upon the voting or transfer thereof pursuant
to applicable law or the Company’s Certificate of Incorporation, Bylaws or
governing documents or any agreement to which the Company is a party or by which
it may be bound.

     

    (k)           Authorization,
Issuance.  All corporate action required to be taken by the
Company for the authorization, issuance and sale of the Shares has been duly and
validly taken.  The Shares have been duly and validly authorized. When
the Shares have been issued and delivered against payment therefor as provided
herein, the Shares, when so issued and sold, will be duly and validly issued,
fully paid and non-assessable and the Investors or other persons in whose names
Shares are registered will acquire good and valid title to such Shares, free and
clear of all liens, encumbrances, equities, preemptive rights and other claims.
The Shares will conform in all material respects to the description thereof
contained in the Registration Statement, the Disclosure Package and the
Prospectus.  No further approval or authority of the shareholders or
the Board of Directors of the Company will be required for the issuance and sale
of the Shares as contemplated herein and in the Subscription
Agreements.  Except as disclosed in each of the Disclosure Package and
Prospectus, there are no outstanding subscriptions, rights, warrants, options,
calls, convertible securities, commitments of sale or rights related to or
entitling any person to purchase or otherwise to acquire any shares of, or any
security convertible into or exchangeable or exercisable for, the capital stock
of, or other ownership interest in, the Company, except for such options or
rights as may have been granted by the Company to employees, directors or
consultants pursuant to the Company’s (i) 1996 Stock Option Plan for Employees
of Merge Healthcare Incorporated dated May 13, 1996, as amended and restated in
its entirety as of September 1, 2003, (ii) 1998 Stock Option Plan for Directors,
(iii) 2000 Employee Stock Purchase Plan, and (iv) 2005 Equity Incentive
Plan.

     

    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

    (l)           No Registration
Rights.  Neither the filing of the Registration Statement nor
the offering or sale of the Shares as contemplated by this Agreement gives rise
to any rights, other than those which have been waived or satisfied, for or
relating to the registration of any shares of Common Stock or other securities
of the Company.

     

    (m)          Due Authorization and
Enforceability. This Agreement and each Subscription Agreement have been
duly authorized, executed and delivered by the Company, and each constitutes a
valid, legal and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as rights to indemnity hereunder
may be limited by federal or state securities laws and except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or similar laws affecting the rights of creditors generally and
subject to general principles of equity.

     

    (n)           No
Violation.  Neither the Company nor any of the Subsidiaries is
in breach or violation of or in default (nor has any event occurred which with
notice, lapse of time or both would result in any breach or violation of, or
constitute a default) (i) under the provisions of its Certificate of
Incorporation, Bylaws or other governing documents, (ii) in the performance or
observance of any term, covenant, obligation, agreement or condition contained
in any indenture, mortgage, deed of trust, bank loan or credit agreement or
other evidence of indebtedness, or any license, lease, contract or other
agreement or instrument to which the Company or any of the Subsidiaries is a
party or by which any of them or any of their properties may be bound or
affected, except as set forth in the Registration Statement, the Disclosure
Package and the Prospectus, or (iii) in the performance or observance of any
statute, law, rule, regulation, ordinance, judgment, order or decree of any
court, regulatory body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over the Company, the Subsidiaries or any of
their respective properties (including, without limitation, those administered
by the Food and Drug Administration of the U.S. Department of Health and Human
Services (the “FDA”) or
by any foreign, federal, state or local regulatory authority performing
functions similar to those preformed by the FDA), except as set forth in the
Registration Statement, the Disclosure Package or the Prospectus; except with
respect to clauses (ii) and (iii) above, to the extent any such contravention
would not result in a Material Adverse Effect.

     

    (o)           No
Conflict.  Except as set forth in the Registration Statement,
the Disclosure Package and the Prospectus, the execution, delivery and
performance by the Company of this Agreement and each Subscription Agreement,
and the consummation of the transactions herein contemplated, including the
issuance and sale by the Company of the Shares, will not conflict with or result
in a breach or violation of, or constitute a default under (nor constitute any
event which with notice, lapse of time or both would result in any breach or
violation of or constitute a default under) (i) the provisions of the
Certificate of Incorporation, Bylaws or other governing documents of the Company
or any of the Subsidiaries, (ii) any material indenture, mortgage, deed of
trust, bank loan or credit agreement or other evidence of indebtedness, or any
material license, lease, contract or other agreement or instrument to which the
Company or any of the Subsidiaries is a party or by which any of them or any of
their respective properties may be bound or affected, or (iii) any federal,
state, local or foreign law, regulation or rule or any decree, judgment or order
applicable to the Company or any of the Subsidiaries.

     

    
      
         

      

      
        -7-

        
          

        

      

      
         

      

    

    (p)           No Consents
Required.  No approval, authorization, consent or order of or
filing with any federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency, or of or with any self-regulatory
organization or other non-governmental regulatory authority (including, without
limitation, the NASDAQ Global Market), or approval of the stockholders of the
Company (including as may be required pursuant to NASDAQ Rules), is required in
connection with the issuance and sale of the Shares or the consummation by the
Company of the transactions contemplated hereby other than (i) as may be
required under the Securities Act, (ii) under the rules and regulations of the
Financial Industry Regulatory Authority (“FINRA”) and (iii) under the
rules and regulations of the NASDAQ Global Market in connection with the listing
of the Shares.  The Company has full power and authority to enter into
this Agreement and each Subscription Agreement and to authorize, issue and sell
the Shares as contemplated by this Agreement and each Subscription
Agreement.

     

    (q)           Absence of Material Changes.
Subsequent to September 30, 2009, except as disclosed in a current report
on Form 8-K filed with the Commission, (a) neither the Company nor any of its
Subsidiaries has incurred any material liability or obligation, direct or
contingent, or entered into any material transaction not in the ordinary course
of business, (b) neither the Company nor any of its Subsidiaries has purchased
any of the Company’s outstanding capital stock, or declared, paid or otherwise
made any dividend or distribution of any kind on the Company’s capital stock,
(c) there has not been any change in the capital stock (other than a change in
the number of outstanding shares of Common Stock due to the issuance of shares
of Common Stock upon the exercise of outstanding options or warrants which were
disclosed in the Disclosure Package and the Prospectus), or material change in
the short−term debt or long−term debt of the Company and its Subsidiaries or any
issue of options, warrants, convertible securities, restricted stock, or other
rights to purchase the capital stock (other than grants of stock options or
restricted stock under the Company’s (i) 1996 Stock Option Plan for Employees of
Merge Healthcare Incorporated dated May 13, 1996, as amended and restated in its
entirety as of September 1, 2003, (ii) 1998 Stock Option Plan for Directors,
(iii) 2000 Employee Stock Purchase Plan, and (iv) 2005 Equity Incentive Plan) of
the Company, and (d) there has not been any material adverse change, or any
development involving a prospective material adverse change, in the business,
operations, prospects, properties, management, financial condition or results of
operations of the Company and the Subsidiaries, taken as a whole, from that set
forth in the Disclosure Package (exclusive of any amendments or supplements
thereto subsequent to the date of this Agreement).

     

    (r)           Permits.  The
Company and each of the Subsidiaries possess all necessary licenses,
authorizations, consents and approvals and have made all necessary filings
required under any federal, state, local or foreign law, regulation or rule
(including, without limitation, those from the FDA and any other foreign,
federal, state or local government or regulatory authorities performing
functions similar to those performed by the FDA) in order to conduct its
business except to the extent such lack of possession would not have a Material
Adverse Effect.  Neither the Company nor any of the Subsidiaries is in
violation of, or in default under, or has received notice of any proceedings
relating to revocation or modification of, any such license, authorization,
consent or approval except to the extent such violation or default or notice
would not have a Material Adverse Effect.  The Company and each of the
Subsidiaries is in compliance in all material respects with all applicable
federal, state, local and foreign laws, regulations, orders or
decrees.

     

    
      
         

      

      
        -8-

        
          

        

      

      
         

      

    

    (s)           Legal Proceedings. There are
no legal or governmental proceedings pending or, to the Company’s knowledge,
threatened or contemplated to which the Company or any of the Subsidiaries is or
would be a party or of which any of their respective properties is or would be
subject at law or in equity, before or by any federal, state, local or foreign
governmental or regulatory commission, board, body, authority or agency, or
before or by any self-regulatory organization or other non-governmental
regulatory authority (including, without limitation, NASDAQ Global Market),
except (i) as described in the Registration Statement, the Disclosure Package
and the Prospectus, (ii) any such proceeding, which if resolved adversely to the
Company or any Subsidiary, would not result in a judgment, decree or order
having, individually or in the aggregate, a Material Adverse Effect or (iii) any
such proceeding that would not prevent or materially and adversely affect the
ability of the Company to consummate the transactions contemplated
hereby.  The Disclosure Package contains in all material respects the
same description of the foregoing matters contained in the
Prospectus.

     

    (t)           Statutes;
Contracts.  There are no statutes or regulations applicable to
the Company or contracts or other documents of the Company which are required to
be described in the Registration Statement, the Disclosure Package or the
Prospectus or filed as exhibits to the Registration Statement by the Securities
Act which have not been so described or filed.

     

    (u)           Independent
Accountants.  BDO Seidman, LLP, who has audited the financial
statements of the Company and the Subsidiaries, is an independent registered
public accounting firm (as defined in Section 2(a)(12) of the Sarbanes-Oxley Act
of 2002 (the “Sarbanes-Oxley
Act”)) with respect to the Company within the meaning of the Securities
Act and the applicable rules and regulations thereunder adopted by the
Commission and the Public Company Accounting Oversight Board (United
States).

     

    (v)           Financial
Statements.  The financial statements of the Company, together
with the related schedules and notes thereto, set forth or incorporated by
reference in the Registration Statement, the Disclosure Package and the
Prospectus comply in all material respects with the applicable requirements of
the Securities Act and the Exchange Act, as applicable, and present fairly in
all material respects (i) the financial condition of the Company and the
Subsidiaries, taken as a whole, as of the dates indicated and (ii) the
consolidated results of operations, stockholders’ equity and changes in cash
flows of the Company and the Subsidiaries, taken as a whole, for the periods
therein specified; and such financial statements and related schedules and notes
thereto have been prepared in conformity with generally accepted accounting
principles as in effect in the United States, consistently applied throughout
the periods involved (except as otherwise stated therein and subject, in the
case of unaudited financial statements, to the absence of footnotes and normal
year-end adjustments).  There are no other financial statements
(historical or pro forma) that are required to be included in the Registration
Statement, the Disclosure Package and the Prospectus; and the Company and the
Subsidiaries do not have any material liabilities or obligations, direct or
contingent (including any off-balance sheet obligations), not disclosed in the
Registration Statement, the Disclosure Package and the Prospectus; and all
disclosures contained in the Registration Statement, the Disclosure Package and
the Prospectus regarding “non-GAAP financial measures” (as such term is defined
by the rules and regulations of the Commission), if any, comply with Regulation
G of the Exchange Act and Item 10(e) of Regulation S-K of the Commission, to the
extent applicable, and present fairly the information shown therein and the
Company’s basis for using such measures.

     

    (w)           Not an Investment
Company.  Neither the Company nor any of the Subsidiaries is
or, after giving effect to the offering and sale of the Shares and the
application of the proceeds thereof as described in the Prospectus, will be
required to register as an “investment company” as defined in the Investment
Company Act of 1940, as amended.

     

    
      
         

      

      
        -9-

        
          

        

      

      
         

      

    

    (x)           Good Title to
Property.  The Company and each of the Subsidiaries has good
and valid title to all property (whether real or personal) described in the
Registration Statement, the Disclosure Package and the Prospectus as being owned
by each of them, in each case free and clear of all liens, claims, security
interests, other encumbrances or defects except such as are described in the
Registration Statement, the Disclosure Package and the Prospectus or those that
would not, individually or in the aggregate materially and adversely affect the
value of such property and do not materially and adversely interfere with the
use made and proposed to be made of such property by the Company and the
Subsidiaries.  All of the property described in the Registration
Statement, the Disclosure Package and the Prospectus as being held under lease
by the Company or a Subsidiary is held thereby under valid, subsisting and
enforceable leases, without any liens, restrictions, encumbrances or claims,
except those that, individually or in the aggregate, are not material and do not
materially interfere with the use made and proposed to be made of such property
by the Company and the Subsidiaries except as would not have a Material Adverse
Effect.

     

    (y)           Intellectual Property
Rights.  The Company and the Subsidiaries own, or have obtained
valid and enforceable licenses for, or other rights to use, the inventions,
patent applications, patents, trademarks (both registered and unregistered),
tradenames, copyrights, trade secrets and other proprietary information
described in the Registration Statement, the Disclosure Package and the
Prospectus as being owned or licensed by them or which are necessary for the
conduct of their respective businesses (collectively, “Intellectual Property”),
except where the failure to own, license or have such rights would not,
individually or in the aggregate, result in a Material Adverse
Effect.  Except as described in the Registration Statement, the
Disclosure Package and the Prospectus or as would not have a Material Adverse
Effect (i) there are no third parties who have or, to the Company’s knowledge,
will be able to establish rights to any Intellectual Property, except for the
ownership rights of the owners of the Intellectual Property which is licensed to
the Company; (ii) to the Company’s knowledge, there is no infringement by third
parties of any Intellectual Property; (iii) there is no pending or, to the
Company’s knowledge, threatened action, suit, proceeding or claim by others
challenging the Company’s rights in or to, or the validity, enforceability, or
scope of, any Intellectual Property owned by or licensed to the Company, and the
Company is unaware of any facts which could form a reasonable basis for any such
claim; (iv) there is no pending or, to the Company’s knowledge, threatened
action, suit, proceeding or claim by others that the Company or any of the
Subsidiaries infringes or otherwise violates any patent, trademark, copyright,
trade secret or other proprietary rights of others, and the Company is unaware
of any facts which could form a reasonable basis for any such claim; (v) to the
Company’s knowledge, there is no patent or patent application that contains
claims that interfere with the issued or pending claims of any of the
Intellectual Property; and (vi) to the Company’s knowledge, there is no prior
art that may render any patent owned by the Company invalid, nor is there any
prior art known to the Company that may render any patent application owned by
the Company unpatentable.

     

    (z)           Taxes.  The Company
and each of the Subsidiaries has timely filed all material federal, state, local
and foreign income and franchise tax returns (or timely filed applicable
extensions therefore) that have been required to be filed and are not in default
in the payment of any taxes which were payable pursuant to said returns or any
assessments with respect thereto, other than any which the Company or any of the
Subsidiaries is contesting in good faith and for which adequate reserves have
been provided and reflected in the Company’s financial statements included in
the Registration Statement, the Disclosure Package and the
Prospectus.  Neither the Company nor any of its Subsidiaries has any
tax deficiency that has been or, to the knowledge of the Company, might be
asserted or threatened against it that would result in a Material Adverse
Effect.

     

    (aa)          Insurance.  The
Company and each of the Subsidiaries maintains insurance in such amounts and
covering such risks as is adequate for the conduct of its business and the value
of its properties and as is customary for companies engaged in similar
businesses in similar industries.  All such insurance is in effect on
the date hereof and will be in effect as of the Closing Date.  Neither
the Company nor any of the Subsidiaries has any reason to believe that it will
not be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary
to continue its business at a cost that would not have a Material Adverse
Effect.

     

    
      
         

      

      
        -10-

        
          

        

      

      
         

      

    

    (bb)         Accounting
Controls.  The Company and each of the Subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with management’s
general or specific authorization, (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles as in effect in the United States and to maintain
accountability for assets, (iii) access to assets is permitted only in
accordance with management’s general or specific authorization, and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.

     

    (cc)          Disclosure
Controls.  The Company has established, maintains and evaluates
“disclosure controls and procedures” (as such term is defined in Rule 13a-15(e)
and 15d-15(e) under the Exchange Act), which (i) are designed to ensure that
material information relating to the Company is made known to the Company’s
principal executive officer and its principal financial officer by others within
the Company, particularly during the periods in which the periodic reports
required under the Exchange Act are being prepared, (ii) have been evaluated for
effectiveness as of the end of the last fiscal period covered by the
Registration Statement, and (iii) such disclosure controls and procedures are
effective to perform the functions for which they were established. There are no
significant deficiencies or material weaknesses in the design or operation of
internal controls which could adversely affect the Company’s ability to record,
process, summarize, and report financial data to management and the Board of
Directors. The Company is not aware of any fraud, whether or not material, that
involves management or other employees who have a role in the Company’s internal
controls; and since the date of the most recent evaluation of such disclosure
controls and procedures, there have been no significant changes in internal
controls or in other factors that could significantly affect internal controls,
including any corrective actions with regard to significant deficiencies and
material weaknesses.

     

    (dd)         Corrupt
Practices.  Neither the Company nor, to the Company’s
knowledge, any other person associated with or acting on behalf of the Company,
including without limitation any director, officer, agent or employee of the
Company or its Subsidiaries has, directly or indirectly, while acting on behalf
of the Company or its Subsidiaries (i) used any corporate funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political parties or
campaigns from corporate funds, (iii) violated any provision of the Foreign
Corrupt Practices Act of 1977, as amended, or (iv) made any other unlawful
payment.

     

    (ee)           No Price
Stabilization.  Neither the Company nor any of the Subsidiaries
nor, to the Company’s knowledge, any of their respective officers, directors,
affiliates or controlling persons has taken or will take, directly or
indirectly, any action designed to cause or result in, or which has constituted
or which might reasonably be expected to constitute the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
of the Shares.

     

    (ff)           No Undisclosed
Relationships.  No relationship, direct or indirect, exists
between or among the Company on the one hand and the directors, officers,
stockholders, customers or suppliers of the Company on the other hand which is
required to be described in the Registration Statement, the Disclosure Package
and the Prospectus which has not been so described. There are no outstanding
loans, advances (except normal advances for business expenses in the ordinary
course of business) or guarantees of indebtedness by the Company to or for the
benefit of any of the officers or directors of the Company or any member of
their respective immediate families, except as disclosed in the Registration
Statement, the Disclosure Package and the Prospectus.

     

    
      
         

      

      
        -11-

        
          

        

      

      
         

      

    

    (gg)         Sarbanes-Oxley
Act.  The Company, and to its knowledge, all of the Company’s
directors or officers, in their capacities as such, are in compliance in all
material respects with all applicable effective provisions of the Sarbanes-Oxley
Act and any related rules and regulations promulgated by the
Commission.

     

    (hh)         Brokers
Fees.  Neither the Company nor any of the Subsidiaries is a
party to any contract, agreement or understanding with any person (other than
this Agreement and the engagement letter with the Placement Agents) that would
give rise to a valid claim against the Company or the Subsidiaries or the
Placement Agents for a brokerage commission, finder’s fee or other like payment
in connection with the offering and sale of the Shares.

     

    (ii)           Exchange Act Requirements.
The Company has filed in a timely manner (or received an extension and has filed
prior to the expiration of such extension) all reports required to be filed
pursuant to Sections 13(a), 13(e), 14 and 15(d) of the Exchange Act during the
preceding 12 months.

     

    (jj)           FINRA
Affiliations.  To the Company’s knowledge, there are no
affiliations or associations between (i) any member of FINRA and (ii) the
Company or any of the Company’s officers, directors or 5% or greater
securityholders or any beneficial owner of the Company’s unregistered equity
securities that were acquired at any time on or after the one hundred eightieth
(180th) day
immediately preceding (A) the date the Registration Statement was initially
filed with the Commission and (B) the date the Prospectus was filed with the
Commission, except as set forth in the Registration Statement, the Disclosure
Package and the Prospectus or except as otherwise communicated, in writing, to
the Placement Agents.

     

    (kk)          Compliance with Environmental
Laws.  The Company and the Subsidiaries (a) are in compliance
with any and all applicable foreign, federal, state and local laws, orders,
rules, regulations, directives, decrees and judgments relating to the protection
of human health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants (“Environmental Laws”), (b)
have received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses and (c) are
in compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals would not,
individually or in the aggregate, result in a Material Adverse
Effect.  There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related constraints
on operating activities and any potential liabilities to third parties) which
would, individually or in the aggregate, result in a Material Adverse
Effect.

     

    (ll)           No Labor
Disputes.  Neither the Company nor any Subsidiary is engaged in
any unfair labor practice; except for matters that would not, individually or in
the aggregate, result in a Material Adverse Effect.  (i) There is (A)
no unfair labor practice complaint pending or, to the Company’s knowledge,
threatened against the Company or any Subsidiary before the National Labor
Relations Board, and no grievance or arbitration proceeding arising out of or
under collective bargaining agreements is pending or, to the Company’s
knowledge, threatened, (B) no strike, labor dispute, slowdown or stoppage
pending or, to the Company’s knowledge, threatened against the Company or any
Subsidiary and (C) to the Company’s knowledge, no union representation dispute
currently existing concerning the employees of the Company or any Subsidiary,
and (ii) to the Company’s knowledge (A) no union organizing activities are
currently taking place concerning the employees of the Company or any
Subsidiary, and (B) there has been no violation of any federal, state, local or
foreign law relating to discrimination in the hiring, promotion or pay of
employees or any applicable wage or hour laws concerning the employees of the
Company or any Subsidiary except as would not have a Material Adverse
Effect.

     

    
      
         

      

      
        -12-

        
          

        

      

      
         

      

    

    (mm)        ERISA.  The Company
is in compliance in all material respects with all presently applicable
provisions of the Employee Retirement Income Security Act of 1974, as amended,
including the regulations and published interpretations thereunder (“ERISA”); no “reportable
event” (as defined in ERISA) has occurred with respect to any “pension plan” (as
defined in ERISA) for which the Company would have any liability; the Company
has not incurred and does not expect to incur liability under (i) Title IV of
ERISA with respect to termination of, or withdrawal from, any “pension plan” or
(ii) Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended,
including the regulations and published interpretations thereunder (the “Code”); and each “pension
plan” for which the Company would have any liability that is intended to be
qualified under Section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, whether by action or by failure to act, which
would cause the loss of such qualification.

     

    (nn)         NASDAQ Global Market; Exchange Act
Registration.  The Common Stock is registered pursuant to
Section 12(b) of the Exchange Act and listed on the NASDAQ Global Market, and
the Company has taken no action designed to, or likely to have the effect of,
terminating the registration of the Common Stock under the Exchange Act or
delisting the Common Stock from the NASDAQ Global Market, nor has the Company
received any notification that the Commission or the NASDAQ Global Market is
contemplating terminating such registration or listing. The Company has complied
in all material respects with the applicable requirements of the NASDAQ Global
Market for maintenance of listing of the Common Stock thereon.

     

    (oo)         PFIC Status.  The
Company is not, for the taxable year ended December 31, 2008, and upon
consummation of the transactions described hereby and the application of the
proceeds as described in the Registration Statement, the Disclosure Package and
the Prospectus is not expected to become, a Passive Foreign Investment Company
within the meaning of Section 1297 of the Internal Revenue Code, as
amended.

     

    (pp)         Statistical or Market-Related
Data.  Any statistical, industry-related and market-related
data included or incorporated by reference in the Registration Statement, the
Disclosure Package and the Prospectus, is based on or derived from sources that
the Company reasonably and in good faith believes to be reliable and accurate in
all material respects, and such data agrees with the sources from which it is
derived in all material respects.

     

    (qq)          Descriptions of
Documents.  The statements set forth in each of the
Registration Statement, the Disclosure Package and the Prospectus describing the
Shares and this Agreement, insofar as they purport to describe the provisions of
the laws and documents referred to therein, are accurate, complete and fair in
all material respects.

     

    (rr)           Money Laundering
Laws.  The operations of the Company are and have been
conducted at all times in compliance in all material respects with applicable
financial recordkeeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, the money laundering statutes of
all jurisdictions, the rules and regulations thereunder and any related or
similar rules, regulations or guidelines, issued, administered or enforced by
any governmental agency (collectively, the “Money Laundering Laws”) and
no action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company with respect to the
Money Laundering Laws is pending, or to the knowledge of the Company,
threatened.

     

    
      
         

      

      
        -13-

        
          

        

      

      
         

      

    

    (ss)           OFAC.  Neither the
Company nor any of its Subsidiaries nor, to the knowledge of the Company, any
director, officer, agent, employee or affiliate of the Company or any of its
Subsidiaries is currently subject to any U.S. sanctions administered by the
Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will
not directly or indirectly use the proceeds of the offering, or lend, contribute
or otherwise make available such proceeds to any subsidiary, joint venture
partner or other person or entity that, to the Company’s knowledge, will use
such proceeds, for the purpose of financing the activities of any person
currently subject to any U.S. sanctions administered by OFAC.

     

    (tt)           Lock-Up
Agreements.  The Company has obtained for the benefit of the
Placement Agents the agreement, in the form set forth as Exhibit C hereto, of
certain of its stockholders listed on Schedule II hereto
(each a “Lock-Up
Agreement” and collectively, the “Lock-Up
Agreements”).

     

    Any
certificate signed by any officer of the Company or a Subsidiary and delivered
to the Placement Agents or to counsel for the Placement Agents in connection
with the offering of the Shares shall be deemed a representation and warranty by
the Company (and not such officer in an individual capacity) to the Placement
Agents as to the matters covered thereby.

     

    
      	
              Section
    3.

            	
              Covenants.

            

    

     

    The
Company covenants and agrees with the Placement Agents as follows:

     

    (a)             Reporting Obligations; Exchange Act
Compliance.  The Company will (i) file the Preliminary
Prospectus, if any, and the Prospectus with the Commission within the time
periods specified by Rule 424(b) and Rules 430A, 430B and 430C, as applicable,
under the Securities Act, (ii) file any Issuer Free Writing Prospectus to the
extent required by Rule 433 under the Securities Act, if applicable, (iii) file
promptly all reports required to be filed by the Company with the Commission
pursuant to Section 13(a), 13(c) or 15(d) of the Exchange Act subsequent to the
date of the Prospectus and during such period as the Prospectus would be
required by law to be delivered  (whether physically or through
compliance with Rule 172 under the Securities Act or any similar rule) (the
“Prospectus Delivery
Period”), and (iv) furnish copies of each Issuer Free Writing Prospectus,
if any, (to the extent not previously delivered) to the Placement Agents prior
to 11:00 a.m. Eastern time, on the second business day next succeeding the date
of this Agreement in such quantities as the Placement Agents shall reasonably
request.

     

    (b)             Abbreviated Registration
Statement.  If the Company elects to rely upon Rule 462(b)
under the Securities Act, the Company shall file a registration statement under
Rule 462(b) with the Commission in compliance with Rule 462(b) by 8:00 a.m.,
Eastern time, on the business day next succeeding the date of this Agreement,
and the Company shall at the time of filing either pay to the Commission the
filing fee for such Rule 462(b) registration statement or give irrevocable
instructions for the payment of such fee pursuant to the Rules and
Regulations.

     

    (c)             Amendments or
Supplements.  The Company will not, during the Prospectus Delivery Period in
connection with the Offering contemplated by this Agreement, file any amendment
or supplement to the Registration Statement or the Prospectus unless a copy
thereof shall first have been submitted to the Placement Agents within a
reasonable period of time prior to the filing thereof and the Placement Agents
shall not have reasonably objected thereto in good faith.

     

    
      
         

      

      
        -14-

        
          

        

      

      
         

      

    

    (d)            Free Writing
Prospectuses.  The Company will (i) not make any offer relating
to the Shares that would constitute an “issuer free writing prospectus” (as
defined in Rule 433) or that would otherwise constitute a “free writing
prospectus” (as defined in Rule 405 under the Securities Act) required to be
filed by the Company with the Commission under Rule 433 under the Securities Act
in connection with the sale of the Shares unless the Placement Agents approve
its use in writing prior to first use (each, a “Permitted Free Writing
Prospectus”); provided that the prior written consent of the Placement
Agents hereto shall be deemed to have been given in respect of the Issuer Free
Writing Prospectus(es) included in Schedule I hereto,
(ii) treat each Permitted Free Writing Prospectus as an Issuer Free Writing
Prospectus, (iii) comply with the requirements of Rules 164 and 433 under the
Securities Act applicable to any Issuer Free Writing Prospectus, including the
requirements relating to timely filing with the Commission, legending and record
keeping and (iv) not take any action that would result in the Placement Agents
or the Company being required to file with the Commission pursuant to Rule
433(d) under the Securities Act a free writing prospectus prepared by or on
behalf of such Placement Agents that such Placement Agents otherwise would not
have been required to file thereunder. The Company will satisfy the conditions
in Rule 433 under the Securities Act to avoid a requirement to file with the
Commission any electronic road show.

     

    (e)            Notice to Placement
Agents.  The Company will notify the Placement Agents promptly,
and will, if requested, confirm such notification in writing: (i) of the receipt
of any comments of, or requests for additional information from, the Commission
relating, directly or indirectly, to the sale of the Shares; (ii) of the time
and date of any filing of any post-effective amendment to the Registration
Statement or any amendment or supplement to the Disclosure Package or the
Prospectus relating, directly or indirectly, to the sale of the Shares; (iii) of
the time and date when any post-effective amendment to the Registration
Statement becomes effective; (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement, or any
post-effective amendment thereto or any order preventing or suspending the use
of any prospectus included in the Disclosure Package, the Prospectus or any
Issuer Free Writing Prospectus, or the initiation of any proceedings for that
purpose or the threat thereof; (v) of receipt by the Company of any notification
with respect to any suspension or the approval of the Shares from any securities
exchange upon which they are listed for trading or included or designated for
quotation, or the initiation or threatening of any proceeding for such
purpose.  The Company will use its reasonable best efforts to prevent
the issuance or invocation of any such stop order or suspension by the
Commission and, if any such stop order or suspension is so issued or invoked, to
obtain as soon as possible the withdrawal or removal thereof.

     

    (f)             Filing of Amendments or
Supplements. If, during the Prospectus Delivery Period, any event shall
occur or condition exist as a result of which it is necessary to amend or
supplement the Prospectus (or, if the Prospectus is not yet available to
prospective purchasers, the Disclosure Package) in order to make the statements
therein, in the light of the circumstances when the Prospectus (or, if the
Prospectus is not yet available to prospective purchasers, the Disclosure
Package) is delivered to an Investor, not misleading, or if, in the opinion of
counsel for the Placement Agents, it is necessary to amend or supplement the
Prospectus (or, if the Prospectus is not yet available to prospective
purchasers, the Disclosure Package) to comply with applicable law, forthwith to
prepare, file with the Commission and furnish, at its own expense, to the
Placement Agents, either amendments or supplements to the Prospectus (or, if the
Prospectus is not yet available to prospective purchasers, the Disclosure
Package) so that the statements in the Prospectus (or, if the Prospectus is not
yet available to prospective purchasers, the Disclosure Package) as so amended
or supplemented will not, in the light of the circumstances when the Prospectus
(or, if the Prospectus is not yet available to prospective purchasers, the
Disclosure Package) is delivered to an Investor, be misleading or so that the
Prospectus (or, if the Prospectus is not yet available to prospective
purchasers, the Disclosure Package), as amended or supplemented, will comply
with law. If at any time following issuance of an Issuer Free Writing Prospectus
there occurred or occurs an event or development as a result of which such
Issuer Free Writing Prospectus conflicted or would conflict with the information
contained in the Registration Statement relating to the Shares or included or
would include an untrue statement of a material fact or omitted or would omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances prevailing at that subsequent time, not misleading,
the Company promptly will notify the Placement Agents and will promptly amend or
supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate
or correct such conflict, untrue statement or omission.

     

    
      
         

      

      
        -15-

        
          

        

      

      
         

      

    

    (g)            Delivery of
Copies.  The Company will deliver promptly to the Placement
Agents and their counsel such number of the following documents as the Placement
Agents shall reasonably request:  (i) conformed copies of the
Registration Statement as originally filed with the Commission and each
amendment thereto (in each case excluding exhibits), (ii) copies of any
Preliminary Prospectus or Issuer Free Writing Prospectus, (iii) during the
Prospectus Delivery Period, copies of the Prospectus (or any amendments or
supplements thereto); (iii) any document incorporated by reference in the
Prospectus (other than any such document that is filed with the Commission
electronically via EDGAR or any successor system) and (iv) all correspondence to
and from, and all documents issued to and by, the Commission in connection with
the registration of the Shares under the Securities Act.

     

    (h)            Earnings Statement.  As
soon as practicable, but in any event not later than 15 months after the end of
the Company’s current fiscal quarter, the Company will make generally available
to holders of its securities an earnings statement of the Company (which need
not be audited) that will satisfy the provisions of Section 11(a) and Rule 158
of the Securities Act.

     

    (i)             Use of
Proceeds.  The Company will apply the net proceeds from the
sale of the Shares in the manner set forth in the Registration Statement,
Disclosure Package and the Prospectus under the heading “Use of
Proceeds”.

     

    (j)             Public
Communications.  Prior to the Closing Date, the Company will
not issue any press release or other communication directly or indirectly or
hold any press conference with respect to the Company, its condition, financial
or otherwise, or the earnings, business, operations or prospects of any of them,
or the offering of the Shares, without the prior written consent of the
Placement Agents, unless in the reasonable judgment of the Company and its
counsel, and after notification to the Placement Agents, such press release or
communication is required by law, in which case the Company shall use its
reasonable best efforts to allow the Placement Agents reasonable time to comment
on such release or other communication in advance of such issuance.

     

    (k)             Lock-Up
Period.  For a period of 90 days after the date hereof (the
“Lock-Up Period”), the
Company will not directly or indirectly, (1) offer to sell, hypothecate, pledge,
announce the intention to sell, sell, contract to sell, sell any option or
contract to purchase (to the extent such option or contract to purchase is
exercisable within one year from the Closing Date), purchase any option or
contract to sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of, directly or indirectly, or establish or increase a put
equivalent position or liquidate or decrease a call equivalent position within
the meaning of Section 16 of the Exchange Act, with respect to, any shares of
Common Stock, or any securities convertible into or exercisable or exchangeable
for shares of Common Stock, (2) file or cause to become effective a registration
statement under the Securities Act relating to the offer and sale of any shares
of Common Stock or securities convertible into or exercisable or exchangeable
for shares of Common Stock, or (3) enter into any swap or other agreement that
transfers, in whole or in part, any of the economic consequences of ownership of
the Common Stock, whether any such transaction described in clauses (1), (2) or
(3) above is to be settled by delivery of shares of Common Stock or such other
securities, in cash or otherwise, without the prior written consent of the
Placement Agents (which consent may be withheld in their sole discretion), other
than (i) the Shares to be sold hereunder, (ii) the issuance of stock options or
shares of restricted stock to employees, directors and consultants pursuant to
the Company’s (A) 1996 Stock Option Plan for Employees of Merge Healthcare
Incorporated dated May 13, 1996, as amended and restated in its entirety as of
September 1, 2003, (B) 1998 Stock Option Plan for Directors, (C) 2000 Employee
Stock Purchase Plan, and (D) 2005 Equity Incentive Plan, (iii) issuances of
shares of Common Stock upon the exercise of options or warrants disclosed as
outstanding in the Disclosure Package and the Prospectus or upon the conversion
or exchange of convertible or exchangeable securities disclosed as outstanding
in the Disclosure Package and the Prospectus, (iv) the issuance by the Company
of any shares of Common Stock as consideration for mergers, acquisitions, other
business combinations, or strategic alliances, occurring after the date of this
Agreement; provided
that each recipient of shares pursuant to this clause (iv) agrees that all such
shares remain subject to restrictions substantially similar to those contained
in this subsection
3(k), or (v) the purchase or sale of the Company’s securities pursuant to
a plan, contract or instruction that satisfies all of the requirements of Rule
10b5-1(c)(1)(i)(B) that was in effect prior to the date
hereof.  Notwithstanding the foregoing, for the purpose of allowing
the Placement Agents to comply with FINRA Rule 2711(f)(4), if (1) during the
last 17 days of the Lock-Up Period, the Company releases earnings results or
publicly announces other material news or a material event relating to the
Company occurs or (2) prior to the expiration of the Lock-Up Period, the Company
announces that it will release earnings results during the 16 day period
beginning on the last day of the Lock-Up Period, then in each case the Lock-Up
Period will be extended until the expiration of the 18 day period beginning on
the date of release of the earnings results or the public announcement regarding
the material news or the occurrence of the material event, as applicable, unless
the Placement Agents waive, in writing, such extension.  The Placement
Agents agree to waive such extension if the provisions of FINRA Rule 2711(f)(4)
are not applicable to the Offering. The Company agrees not to accelerate the
vesting of any option or warrant or the lapse of any repurchase right prior to
the expiration of the Lock-Up Period.

     

    
      
         

      

      
        -16-

        
          

        

      

      
         

      

    

    (l)             Stabilization.  The
Company will not take directly or indirectly any action designed, or that might
reasonably be expected to cause or result in, or that will constitute,
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of any of the Shares.

     

    (m)           Transfer
Agent.  The Company shall engage and maintain, at its expense,
a transfer agent and, if necessary under the jurisdiction of incorporation of
the Company, a registrar for the Shares.

     

    (n)            Investment Company
Act.  The Company shall not invest, or otherwise use the
proceeds received by the Company from its sale of the Shares in such a manner as
would require the Company to register as an investment company under the
Investment Company Act.

     

    (o)            Sarbanes-Oxley
Act.  The Company will comply with all effective applicable
provisions of the Sarbanes Oxley Act.

     

    (p)            Periodic
Reports.  The Company will file with the Commission such
periodic and special reports as required by the Exchange Act.

     

    (q)            NASDAQ Global
Market.  The Company will use its reasonable best efforts to
obtain approval for, and maintain the listing of the Shares on the NASDAQ Global
Market for so long as the Common Stock is listed thereon.

     

    
      	
              Section
    4.

            	
              Costs and
      Expenses.

            

    

     

    The
Company, whether or not the transactions contemplated hereunder are consummated
or this Agreement is terminated, will pay all costs and expenses incident to the
performance of its obligations under this Agreement and in connection with the
transactions contemplated hereby, including but not limited to costs and
expenses of or relating to (i) the preparation, printing, filing, delivery and
shipping of the Registration Statement, any Issuer Free Writing Prospectus, the
Disclosure Package and the Prospectus, and any amendment or supplement to any of
the foregoing and the printing and furnishing of copies of each thereof to the
Placement Agents and dealers (including costs of mailing and shipment), (ii) the
registration, issue, sale and delivery of the Shares including any stock or
transfer taxes and stamp or similar duties payable upon the sale, issuance or
delivery of the Shares and the printing, delivery, shipping of the certificates
representing the Shares, (iii) the fees and expenses of any transfer agent or
registrar for the Shares, (iv) the filing fees required to be paid by the
Company with FINRA (including all COBRADesk fees), (v) fees, disbursements and
other charges of counsel to the Company (vi) listing fees, if any, for the
listing or quotation of the Shares on the NASDAQ Global Market, (vii) fees and
disbursements of the Company’s auditors incurred in delivering the letters
described in Sections
5(i), (j) and (k) hereof, and
(viii) the costs and expenses of the Company in connection with the marketing of
the Offering and the sale of the Shares to prospective investors including, but
not limited to, those related to any presentations or meetings undertaken in
connection therewith including, without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of any
consultants (other than the Placement Agents) engaged by the Company in
connection with the road show presentations, travel, lodging and other expenses
incurred by the officers of the Company and any such consultants, and the cost
of any aircraft or other transportation chartered by the Company in connection
with the road show.

    
      
         

      

      
        -17-

        
          

        

      

      
         

      

    

    If the
Offering is consummated, the Company shall reimburse the Placement Agents for
all reasonable out-of-pocket expenses incurred by the Placement Agents in
connection with the Offering, including, but not limited to (i) the fees and
disbursements of counsel to the Placement Agents and (ii) travel, lodging, and
other road show expenses, mailing, printing and reproduction expenses, and any
expenses incurred by the Placement Agents in conducting due diligence of the
Company.  Notwithstanding the foregoing, the expenses of the Placement
Agents which the Company shall be obligated to reimburse hereunder shall not
exceed the lesser of (i) an amount equal to $150,000 in the aggregate or (ii) 8%
of the gross proceeds received by the Company from the sale of the Shares, less
the Placement Fee.  It is understood that except as provided in this
Section 4,
Section 6 and
Section 8(b),
the Placement Agents shall pay all of their own expenses.

     

    
      	
              Section
    5.

            	
              Conditions of Placement Agents’
      Obligations.

            

    

     

    The
obligations of the Placement Agents hereunder are subject to the following
conditions:

     

    (a)           Filings with the
Commission.  The Prospectus shall have been filed with the
Commission pursuant to Rule 424(b) under the Securities Act at or before 5:30
p.m., Eastern time, on the second full business day after the date of this
Agreement (or such earlier time as may be required under the Securities
Act).

     

    (b)           Abbreviated Registration
Statement.  If the Company has elected to rely upon Rule
462(b), the registration statement filed under Rule 462(b) shall have become
effective under the Securities Act by 8:00 a.m., Eastern time, on the business
day next succeeding the date of this Agreement.

     

    (c)           No Stop
Orders.  Prior to the Closing: (i) no stop order suspending the
effectiveness of the Registration Statement shall have been issued under the
Securities Act and no proceedings initiated under Section 8(d) or 8(e) of the
Securities Act for that purpose shall be pending or threatened by the
Commission, and (ii) any request for additional information on the part of the
Commission (to be included in the Registration Statement, the Disclosure
Package, the Prospectus or any Issuer Free Writing Prospectus or otherwise)
shall have been complied with to the reasonable satisfaction of the Placement
Agents.

     

    
      
         

      

      
        -18-

        
          

        

      

      
         

      

    

    (d)           Action Preventing
Issuance.  No action shall have been taken and no statute,
rule, regulation or order shall have been enacted, adopted or issued by any
governmental agency or body which would, as of the Closing Date, prevent the
issuance or sale of the Shares; and no injunction, restraining order or order of
any other nature by any federal or state court of competent jurisdiction shall
have been issued as of the Closing Date which would prevent the issuance or sale
of the Shares.

     

    (e)           Objection of Placement
Agents.  No prospectus or amendment or supplement to the
Registration Statement shall have been filed to which the Placement Agents shall
have objected in writing, which objection shall not be
unreasonable.  The Placement Agents shall not have advised the Company
that the Registration Statement, the Disclosure Package or the Prospectus, or
any amendment thereof or supplement thereto, or any Issuer Free Writing
Prospectus contains an untrue statement of fact which, in their opinion, is
material, or omits to state a fact which, in their opinion, is material and is
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading.

     

    (f)           No Material Adverse
Change.  (i)  Prior to the Closing, there shall not
have occurred any change, or any development involving a prospective change, in
the business, operations, prospects, properties, financial condition or results
of operations of the Company and the Subsidiaries, taken as a whole, from that
set forth in the Disclosure Package and the Prospectus that, in the Placement
Agents’ judgment, is material and adverse and that makes it, in the Placement
Agents’ judgment, impracticable to market the Shares on the terms and in the
manner contemplated in the Disclosure Package.

     

    (ii)  There
shall not have occurred any of the following:  (i) a suspension
or material limitation in trading in securities generally on the New York Stock
Exchange, the NASDAQ Stock Market, the NASDAQ Global Select Market, the NASDAQ
Global Market, the NASDAQ Capital Market, the NYSE Amex or the over the counter
market or the establishing on such exchanges or markets by the SEC or by such
exchanges or markets of minimum or maximum prices that are not in force and
effect on the date hereof; (ii) a suspension or material limitation in
trading in the Company’s securities on the NASDAQ Global Market or any other
exchange or market or the establishing on any such market or exchange by the SEC
or by such market of minimum or maximum prices that are not in force and effect
on the date hereof; (iii) a general moratorium on commercial banking
activities declared by either federal or any state authorities; (iv) the
outbreak or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, which in the
Placement Agents’ judgment makes it impracticable or inadvisable to proceed with
the public offering or the delivery of the Shares in the manner contemplated in
the Prospectus; or (v) any calamity or crisis, change in national,
international or world affairs, act of God, change in the international or
domestic markets, or change in the existing financial, political or economic
conditions in the United States or elsewhere, that in the Placement Agents’
judgment makes it impracticable or inadvisable to proceed with the public
offering or the delivery of the Shares in the manner contemplated in each of the
Disclosure Package and the Prospectus.

     

    (g)           Representations and
Warranties.  Each of the representations and warranties of the
Company contained herein shall be true and correct in all material respects when
made and on and as of the Closing Date, as if made on such date (except that
those representations and warranties that address matters only as of a
particular date shall remain true and correct in all material respects as of
such date), and all covenants and agreements herein contained to be performed on
the part of the Company and all conditions herein contained to be fulfilled or
complied with by the Company at or prior to the Closing Date shall have been
duly performed, fulfilled or complied with.

     

    
      
         

      

      
        -19-

        
          

        

      

      
         

      

    

    (h)           Lock-Up
Agreements.  The Placement Agents shall have received each of
the signed Lock-Up Agreements referred to in Section 2(tt) hereof
and each such Lock-Up Agreement shall be in full force and effect as of the
Closing Date.

     

    (i)           Opinion of Outside Counsel to the
Company.  The Placement Agents shall have received from
McDermott, Will & Emery LLP, counsel to the Company, such counsel’s written
opinion, addressed to the Placement Agents and dated the Closing Date, in form
and substance reasonably satisfactory to the Placement Agents.

     

    (j)           Opinion of General Counsel of the
Company.  The Placement Agents shall have received from Ann
Mayberry-French, Esq., Vice President and General Counsel of the Company, a
written opinion, addressed to the Placement Agents and dated the Closing Date,
in form and substance reasonably satisfactory to the Placement
Agents.

     

    (k)           The
Placement Agents shall have received from BDO Seidman, LLP letters dated,
respectively, the date of the Prospectus and the Closing Date, and addressed to
the Placement Agents in customary forms reasonably satisfactory to the Placement
Agents, which letters shall cover, without limitation, the various financial
disclosures contained in the Registration Statement, the Prospectus and the
Permitted Free Writing Prospectuses relating to the Company, if
any.

     

    (l)           The
Placement Agents shall have received from Voldal Wortelle & Co., P.S.
letters dated, respectively, the date of the Prospectus and the Closing Date,
and addressed to the Placement Agents in customary forms reasonably satisfactory
to the Placement Agents, which letters shall cover, without limitation, the
various financial disclosures contained in the Registration Statement, the
Prospectus and the Permitted Free Writing Prospectuses relating to Confirma,
Inc., if any.

     

    (m)           The
Placement Agents shall have received from Ernst & Young LLP letters dated,
respectively, the date of the Prospectus and the Closing Date, and addressed to
the Placement Agents in customary forms reasonably satisfactory to the Placement
Agents, which letters shall cover, without limitation, the various financial
disclosures contained in the Registration Statement, the Prospectus and the
Permitted Free Writing Prospectuses relating to etrials Worldwide, Inc., if
any.

     

    (n)           Officer’s
Certificate.  The Placement Agents shall have received on the
Closing Date a certificate, addressed to the Placement Agents and dated the
Closing Date, of the chief executive or chief operating officer and the chief
financial officer or chief accounting officer of the Company to the effect
that:

     

    (i)           each
of the representations, warranties and agreements of the Company in this
Agreement were true and correct in all material respects when originally made
and are true and correct in all material respects as of the Time of Sale and the
Closing Date (except that those representations and warranties that address
matters only as of a particular date shall remain true and correct in all
material respects as of such date); and the Company has complied with all
agreements and satisfied all the conditions on its part required under this
Agreement to be performed or satisfied at or prior to the Closing
Date;

     

    (ii)           subsequent
to the respective dates as of which information is given in the Disclosure
Package, there has not been (A) a material adverse change or any development
involving a prospective material adverse change in the general affairs,
business, properties, management, financial condition or results of operations
of the Company and the Subsidiaries taken as a whole, (B) any transaction that
is material to the Company and the Subsidiaries taken as a whole, except
transactions entered into in the ordinary course of business, (C) any
obligation, direct or contingent, that is material to the Company and the
Subsidiaries taken as a whole, incurred by the Company or the Subsidiaries,
except obligations incurred in the ordinary course of business, (D) except as
disclosed in the Disclosure Package and in the Prospectus, any change in the
capital stock (other than a change in the number of outstanding shares of Common
Stock due to the issuance of shares upon the exercise of outstanding options or
warrants) or any material change in the short term or long term indebtedness of
the Company or any of the Subsidiaries taken as a whole, (E) any dividend or
distribution of any kind declared, paid or made on the capital stock of the
Company or any of the Subsidiaries or (F) any loss or damage (whether or not
insured) to the property of the Company or any of its Subsidiaries which has
been sustained or will have been sustained which has had or is reasonably likely
to result in a Material Adverse Effect;

     

    
      
         

      

      
        -20-

        
          

        

      

      
         

      

    

    (iii)           no
stop order suspending the effectiveness of the Registration Statement or any
part thereof or any amendment thereof or the qualification of the Shares for
offering or sale, nor suspending or preventing the use of the Disclosure
Package, the Prospectus or any Issuer Free Writing Prospectus shall have been
issued, and no proceedings for that purpose shall be pending or to their
knowledge, threatened by the Commission or any state or regulatory body;
and

     

    (iv)           the
signers of said certificate have reviewed the Registration Statement, the
Disclosure Package and the Prospectus, and any amendments thereof or supplements
thereto (and any documents filed under the Exchange Act and deemed to be
incorporated by reference into the Disclosure Package and the Prospectus), and
(A) (i) each part of the Registration Statement and any amendment thereof do not
and did not contain when the Registration Statement (or such amendment) became
effective, any untrue statement of a material fact or omit to state, and did not
omit to state when the Registration Statement (or such amendment) became
effective, any material fact required to be stated therein or necessary to make
the statements therein not misleading and (ii) as of the Time of Sale, neither
the Disclosure Package nor any individual Issuer Limited Use Free Writing
Prospectus, when considered together with the Disclosure Package, contained any
untrue statement of material fact or omits to state any material fact necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading and (iii) the Prospectus, as amended or supplemented,
does not and did not contain, as of its issue date and as of the Closing Date,
any untrue statement of material fact or omit to state and did not omit to state
as of such date, a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, and (B)
since the Time of Sale, there has occurred no event required to be set forth in
an amendment or supplement to the Registration Statement, the Disclosure Package
or the Prospectus which has not been so set forth and there has been no document
required to be filed under the Exchange Act that upon such filing would be
deemed to be incorporated by reference in to the Disclosure Package and into the
Prospectus that has not been so filed.

     

    (o)           Secretary’s
Certificate.  On the Closing Date, the Company shall have
furnished to the Placement Agents a Secretary’s Certificate of the
Company.

     

    (p)           Company Corporate
Documents.  On the Closing Date, the Company shall have
delivered to the Placement Agents a certificate evidencing the incorporation and
good standing of the Company in the state of Delaware issued by the Secretary of
State of the state of Delaware, dated as of a date within three (3) calendar
days of the Closing Date, as well as written bring-down confirmation from a
reputable corporate service agency, dated as of the Closing Date, as to the good
standing of the Company on the Closing Date.

     

    
      
         

      

      
        -21-

        
          

        

      

      
         

      

    

    (q)           Subsidiary Corporate
Documents.  On the Closing Date, the Company shall have
delivered to the Placement Agents a short-form good standing certificate
evidencing the incorporation or formation, as the case may be, and good standing
of each of the Significant Subsidiaries in their respective state (or country)
of incorporation or formation, as the case may be, issued by the Secretary of
State of such state of incorporation or formation (or comparable authority), as
the case may be, dated as of a date within three (3) calendar days of the
Closing Date.

     

    (r)           Certified
Charter.  On the Closing Date, the Company shall have delivered
to the Placement Agents a certified copy of the Certificate of Incorporation of
the Company as certified by the Secretary of State of the state of Delaware as
of a date within three (3) calendar days of the Closing Date.

     

    (s)           Other Filings with the
Commission.  The Company shall have prepared and filed with the
Commission a Current Report on Form 8-K with respect to the transactions
contemplated hereby, including as an exhibit thereto this Agreement and any
other documents relating thereto.

     

    (t)           No FINRA
Objection.  FINRA shall not have raised any objection with
respect to the fairness and reasonableness of the placement agency terms and
arrangements relating to the issuance and sale of the Shares; provided that if
any such objection is raised, the Company and the Placement Agents shall
negotiate promptly and in good faith appropriate modifications to such placement
agency terms and arrangements in order to satisfy such objections.

     

    (u)           NASDAQ Global
Market.  An application shall have been filed with the NASDAQ
Global Market to list the Shares on the NASDAQ Global Market, and the Company
shall not have received notification from the NASDAQ Global Market that the
Shares will not be approved for listing on the NASDAQ Global
Market.

     

    (v)           Additional
Documents.  Prior to the Closing Date, the Company shall have
furnished to the Placement Agents such further information, certificates or
documents as the Placement Agents shall have reasonably requested for the
purpose of enabling them to pass upon the issuance and sale of the Shares as
contemplated herein, or in order to evidence the accuracy of any of the
representations and warranties, or the satisfaction of any of the conditions or
agreements, herein contained.

     

    All
opinions, letters, evidence and certificates mentioned above or elsewhere in
this Agreement shall be deemed to be in compliance with the provisions hereof
only if they are in form and substance reasonably satisfactory to counsel for
the Placement Agents.

    

    If any
condition specified in this Section 5 is not
satisfied when and as required to be satisfied, this Agreement may be terminated
by the Placement Agents by notice to the Company at any time prior to the
Closing Date, which termination shall be without liability on the part of any
party to any other party, except that Section 4, Section 6 and Section 8 shall at
all times be effective and shall survive such termination.

    

    
      	
              Section
      6.

            	
              Indemnification
      and Contribution.

            

    

     

    (a)           Indemnification of the Placement
Agents.  The Company agrees to indemnify, defend and hold
harmless each of the Placement Agents, its respective directors, officers,
employees, agents, affiliates and each person, if any, who controls such
Placement Agent within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, and the successors and assigns of all of the
foregoing persons, from and against any loss, damage, claim or liability, which,
jointly or severally, such Placement Agent or any such person may become subject
under the Securities Act, the Exchange Act, or other federal or state statutory
law or regulation, the common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of the
Company), insofar as such loss, damage, claim or liability (or actions in
respect thereof as contemplated below) arises out of or is based upon: (i) any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, or any amendment thereto or the omission or alleged
omission to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; (ii) any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, any
Issuer Free Writing Prospectus or the Prospectus (or any amendment or supplement
thereto), or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements made therein,
in light of the circumstances under which they were made, not misleading; and,
in the case of (i) and (ii) above, to reimburse such Placement Agent and each
such controlling person for any and all reasonable expenses (including
reasonable fees and disbursements of counsel) as such expenses are incurred by
such Placement Agent or such controlling person in connection with
investigating, defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action; provided, however, that the
foregoing indemnity shall not apply to any loss, claim, damage, liability or
expense to the extent, but only to the extent, it arises out of or is based upon
any untrue statement or alleged untrue statement of a material fact contained in
or omitted from, and in conformity with information concerning such Placement
Agent furnished in writing by or on behalf of such Placement Agent to the
Company expressly for use therein, which information the parties hereto agree is
limited to the Placement Agent Information (as defined in Section 7), (iii) any
untrue statement or alleged untrue statement made by the Company in Section 3 hereof or
the failure by the Company to perform when and as required any agreement or
covenant contained herein or (iv) any untrue statement or alleged untrue
statement of any material fact contained in any audio or visual materials
provided to Investors by or with the approval of the Company or based upon
written information furnished by or on behalf of the Company with its approval
including, without limitation, slides, videos, films or tape recordings used in
any road show or investor presentations made to investors by the Company
(whether in person or electronically) or in connection with the marketing of the
Shares.

     

    
      
         

      

      
        -22-

        
          

        

      

      
         

      

    

    (b)           Indemnification of the
Company.  Each Placement Agent, severally and not jointly, will
indemnify, defend and hold harmless the Company, its directors and officers, and
any person, if any, who controls the Company within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, and the
successors and assigns of all of the foregoing persons, from and against any
loss, claim, damage, liability or expense, as incurred to which, jointly or
severally, the Company or any such person may become subject under the
Securities Act, the Exchange Act, or other federal or state statutory law or
regulation, the common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of such
Placement Agent), insofar as such loss, claim, damage, liability or expense (or
actions in respect thereof as contemplated below) arises out of or is based
upon: (i) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, or any amendment thereto, or the
omission or alleged omission therefrom to state a material fact required to be
stated therein or necessary to make the statements therein not misleading; (ii)
any untrue statement or alleged untrue statement of a material fact contained in
any Preliminary Prospectus, any Issuer Free Writing Prospectus or the Prospectus
(or any amendment or supplement thereto), or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements made therein, in light of the circumstances under which they were
made, not misleading, in the case of each of (i) and (ii) above, to the extent
but only to the extent, that such untrue statement or alleged untrue statement
or omission or alleged omission was made in the Registration Statement, any
Preliminary Prospectus, Issuer Free Writing Prospectus or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with
information concerning such Placement Agent furnished in writing by or on behalf
of such Placement Agent to the Company expressly for use therein and to
reimburse the Company, or any such director, officer or controlling person for
any legal and other expense reasonably incurred by the Company, or any such
director, officer or controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action; provided, that the parties
hereto hereby agree that such written information provided by the Placement
Agents consists solely of the Placement Agent
Information.  Notwithstanding the provisions of this Section 6(b), in no
event shall any indemnity by any Placement Agent under this Section 6(b) exceed
its pro rata share of the Placement Fee.

     

    
      
         

      

      
        -23-

        
          

        

      

      
         

      

    

    (c)           Notice and
Procedures.  If any action, suit or proceeding (each, a “Proceeding”) is brought
against a person (an “indemnified party”) in
respect of which indemnity may be sought against the Company or any Placement
Agent (as applicable, the “indemnifying party”) pursuant
to subsection
(a) or (b), respectively, of
this Section 6,
such indemnified party shall promptly notify such indemnifying party in writing
of the institution of such Proceeding and such indemnifying party shall assume
the defense of such Proceeding, including the employment of counsel reasonably
satisfactory to such indemnified party and payment of all fees and expenses;
provided, however, that
the omission to so notify such indemnifying party shall not relieve such
indemnifying party from any liability which such indemnifying party may have to
any indemnified party or otherwise, except to the extent the indemnifying party
does not otherwise learn of the Proceeding and such failure results in the
forfeiture by the indemnifying party of substantial rights or defenses. The
indemnified party or parties shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of such indemnified party or parties unless (i) the employment of
such counsel shall have been authorized in writing by the indemnifying party in
connection with the defense of such Proceeding, (ii) the indemnifying party
shall not have, within a reasonable period of time in light of the
circumstances, employed counsel to defend such Proceeding or (iii) such
indemnified party or parties shall have reasonably concluded that there may be
defenses available to it or them which are different from, additional to or in
conflict with those available to such indemnifying party, in any of which events
such reasonable fees and expenses shall be borne by such indemnifying party and
paid as incurred (it being understood, however, that such indemnifying party
shall not be liable for the expenses of more than one separate counsel (in
addition to any local counsel) in any one Proceeding or series of related
Proceedings in the same jurisdiction representing the indemnified parties who
are parties to such Proceeding). An indemnifying party shall not be liable for
any settlement of any Proceeding (including by consent to the entry of any
judgment) effected without its written consent but, if settled with its written
consent or if there be a final judgment for the plaintiff, such indemnifying
party agrees to indemnify and hold harmless the indemnified party or parties
from and against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel (which fees and expenses shall be reasonably
documented) as contemplated by the second sentence of this Section 6(c), then
the indemnifying party agrees that it shall be liable for any settlement of any
Proceeding effected without its written consent if (i) such settlement is
entered into more than 90 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall not have fully reimbursed
the indemnified party in accordance with such request prior to the date of such
settlement and (iii) such indemnified party shall have given the indemnifying
party at least 30 days’ prior notice of its intention to settle. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement, compromise or consent to the entry of judgment in any pending or
threatened Proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such Proceeding and does not include an admission of fault or culpability or a
failure to act by or on behalf of such indemnified party.

     

    
      
         

      

      
        -24-

        
          

        

      

      
         

      

    

    (d)           Contribution.  If
the indemnification provided for in this Section 6 is
unavailable to an indemnified party under subsections (a) or
(b) of this
Section 6 or
insufficient to hold an indemnified party harmless in respect of any losses,
claims, damages, liabilities or expenses referred to therein, then each
applicable indemnifying party shall, in lieu of indemnifying such indemnified
party, contribute to the amount paid or payable by such indemnified party as a
result of the losses, claims, damages, liabilities or expenses referred to in
subsection (a)
or (b) above,
(i) in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Placement Agents on the other
from the offering of the Shares or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the indemnifying party or parties on the one hand and
the indemnified party or parties on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable
considerations.  The relative benefits received by the Company on the
one hand and the Placement Agents on the other hand shall be deemed to be in the
same respective proportions as the total net proceeds from the offering of the
Shares (before deducting expenses) received by the Company and the Placement Fee
received by the Placement Agents, in each case as set forth on the cover of the
Prospectus, bear to the aggregate public offering price of the
Shares.  The relative fault of the Company on the one hand and the
Placement Agents on the other hand shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company, on the one hand, or by the Placement
Agents, on the other hand, and the parties’ relevant intent, knowledge, access
to information and opportunity to correct or prevent such untrue statement or
omission.  The Company and the Placement Agents agree that it would
not be just and equitable if contribution pursuant to this subsection (d) were
to be determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to in the
first sentence of this Section
6(d).  The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities referred to in the first
sentence of this Section 6(d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending against any
action or claim which is the subject of this Section
6(d).  Notwithstanding the provisions of this Section 6(d), no
Placement Agent shall be required to contribute any amount in excess of its pro
rata share of the Placement Fee less the amount of any damages which such
Placement Agent has otherwise paid or become liable to pay by reason of such
untrue statement or alleged untrue statement or omission or alleged
omission.  No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.  The Placement Agents’ obligations to contribute as
provided in this Section 6(b) are several and not joint.

     

    (e)           Representations and Agreements to
Survive Delivery.  The obligations of the Company under this
Section 6 shall
be in addition to any liability which the Company may otherwise
have.  The indemnity and contribution agreements of the parties
contained in this Section 6 and the
covenants, warranties and representations of the Company contained in this
Agreement shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of any Placement Agent, any person who controls any Placement Agent within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act or any affiliate of any Placement Agent, or by or on behalf of the Company,
its directors or officers or any person who controls the Company within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act, and (iii) the issuance and delivery of the Shares. The Company and each of
the Placement Agents agree promptly to notify each other of the commencement of
any Proceeding against it and, in the case of the Company, against any of the
Company’s officers or directors in connection with the issuance and sale of the
Shares, or in connection with the Registration Statement, the Disclosure Package
or the Prospectus.

     

    
      
         

      

      
        -25-

        
          

        

      

      
         

      

    

    
      	
              Section
    7.

            	
              Information Furnished by
      Placement Agents.

            

    

     

    The
Company acknowledges that the statements set forth in second paragraph under the
subheading “Fees” under the heading “Plan of Distribution” in the Prospectus
(the “Placement Agent
Information”) constitute the only information relating to the Placement
Agents furnished in writing to the Company by the Placement Agents as such
information is referred to in Sections 2 and 6
hereof.

     

    
      	
              Section
    8.

            	
              Termination.

            

    

     

    (a)    The Placement
Agents shall have the right to terminate this Agreement by giving notice as
hereinafter specified at any time at or prior to the Closing Date, without
liability on the part of the Placement Agents to the Company, if (i) prior to
delivery and payment for the Shares (A) trading in securities generally shall
have been suspended or materially limited on or by the New York Stock Exchange,
the NASDAQ Stock Market, the NASDAQ Global Select Market, the NASDAQ Global
Market, the NASDAQ Capital Market or the NYSE Amex (each, a “Trading Market”), (B) trading
in the shares of Common Stock of the Company shall have been suspended or
materially limited on any exchange or in the over-the-counter market, (C) a
general moratorium on commercial banking activities shall have been declared by
federal or New York state authorities, (D) there shall have occurred any
outbreak or material escalation of hostilities or acts of terrorism involving
the United States or there shall have been a declaration by the United States of
a national emergency or war, (E) there shall have occurred any other calamity or
crisis or any material change in general economic, political or financial
conditions in the United States or elsewhere, if the effect of any such event
specified in clause (D) or (E), in the judgment of the Placement Agents, makes
it impractical or inadvisable to proceed with the completion of the sale of and
payment for the Shares on the Closing Date on the terms and in the manner
contemplated by this Agreement, the Disclosure Package and the Prospectus, or
(ii) since the time of execution of this Agreement or the earlier respective
dates as of which information is given in the Disclosure Package, there has been
(A) any Material Adverse Effect or (B) the Company shall have sustained a loss
by strike, fire, flood, earthquake, accident or other calamity of such character
that in the judgment of the Placement Agents would, individually or in the
aggregate, result in a Material Adverse Effect and which would, in the judgment
of the Placement Agents, make it impracticable or inadvisable to proceed with
the offering or the delivery of the Shares on the terms and in the manner
contemplated in the Disclosure Package and the Prospectus.  Any such
termination shall be without liability of any party to any other party except
that the provisions of Section 4, Section 6, Section 8(b) and
Section 11
hereof shall at all times be effective notwithstanding such
termination.

     

    (b)           If
(1) this Agreement shall be terminated by the Placement Agents pursuant to Section 5, Section 8(a)(i)(B) or
Section
8(a)(ii)(A) or (2) the sale of the Shares to Investors is not consummated
because of any failure, refusal or inability on the part of the Company to
comply with the terms or perform any agreement or obligation of this Agreement
or any Subscription Agreement, other than by reason of a default by the
Placement Agents, the Company will, in addition to paying the amounts described
in Section 4
hereof, reimburse the Placement Agents for all of their reasonable and actual
out-of-pocket disbursements (including, but not limited to, the reasonable fees
and disbursements of its counsel).

    

    

    *

    

    *

    

    *

    
      
         

      

      
        -26-

        
          

        

      

      
         

      

    

    
      	
              Section
    9.

            	
              Notices.

            

    

     

    All
statements, requests, notices and agreements hereunder shall be in writing or by
facsimile, and:

     

    (a)           if
to the Placement Agents, shall be delivered or sent by mail, telex or facsimile
transmission to:

     

    William
Blair & Company, L.L.C.

    222 West
Adams

    Chicago,
IL 60606

    Attention:
General Counsel

    Facsimile
No.: (312) 551-4646

    

    -and-

    

    Craig-Hallum
Capital Group LLC

    222 South
Ninth Street, Suite 350

    Minneapolis,
MN 55402

    Attention:
General Counsel

    Facsimile
No.: (612) 334-6399

    

    -and-

    

    Robert W.
Baird & Co. Incorporated

    777 East
Wisconsin Avenue

    Milwaukee,
WI 53202

    Attention:
General Counsel

    Facsimile
No.: (414) 298-7800

     

    with a
copy (which shall not constitute notice) to:

     

    Lowenstein
Sandler PC

    65
Livingston Avenue

    Roseland,
New Jersey 07068

    Attention:  Steven
M. Skolnick

    Facsimile
No.: (973) 597-2477

     

    (b)           if
to the Company shall be delivered or sent by mail, telex or facsimile
transmission to:

     

    Merge
Healthcare Incorporated

    6737 West
Washington Street, Suite 2250

    Milwaukee,
Wisconsin 53214-5650

    Attention:  General
Counsel

    Facsimile
No.: (414) 977-4202

     

    with a
copy (which shall not constitute notice) to:

     

    McDermott,
Will & Emery LLP

    227 West
Monroe Street

    Chicago,
Illinois 60606

    Attention:  Mark
A. Harris

    Facsimile
No.: (312) 984-7700

    
      
         

      

      
        -27-

        
          

        

      

      
         

      

    

    Any such
notice shall be effective only upon receipt.  Any party to this
Agreement may change such address for notices by sending to the parties to this
Agreement written notice of a new address for such purpose.

     

    
      	
              Section
    10.

            	
              Persons Entitled to Benefit of
      Agreement.

            

    

     

    This
Agreement shall inure to the benefit of and shall be binding upon the Placement
Agents, the Company and their respective successors and assigns and the
controlling persons, officers and directors referred to in Section
6.  Nothing in this Agreement is intended or shall be construed
to give to any other person, firm or corporation, other than the persons, firms
or corporations mentioned in the preceding sentence, any legal or equitable
remedy or claim under or in respect of this Agreement, or any provision herein
contained.  The term “successors and assigns” as herein used shall not
include any purchaser of the Shares by reason merely of such
purchase.

     

    
      	
              Section
    11.

            	
              Governing
      Law.

            

    

     

    This
Agreement shall be governed by and construed in accordance with the laws of the
State of Illinois, without giving effect to the conflicts of laws provisions
thereof.

     

    
      	
              Section
    12.

            	
              No Fiduciary
      Relationship.

            

    

     

    The
Company hereby acknowledges that the Placement Agents are acting solely as
placement agents in connection with the offering of the Company’s securities.
The Company further acknowledges that the Placement Agents are acting pursuant
to a contractual relationship created solely by this Agreement entered into on
an arm’s length basis and in no event do the parties intend that the Placement
Agents act or be responsible as a fiduciary to the Company, its management,
stockholders, creditors or any other person in connection with any activity that
the Placement Agents may undertake or have undertaken in furtherance of the
offering of the Company’s securities, either before or after the date hereof.
The Placement Agents hereby expressly disclaim any fiduciary or similar
obligations to the Company, either in connection with the transactions
contemplated by this Agreement or any matters leading up to such transactions,
and the Company hereby confirms its understanding and agreement to that effect.
The Company and the Placement Agents agree that they are each responsible for
making their own independent judgments with respect to any such transactions,
and that any opinions or views expressed by the Placement Agents to the Company
regarding such transactions, including but not limited to any opinions or views
with respect to the price or market for the Company’s securities, do not
constitute advice or recommendations to the Company. The Company hereby waives
and releases, to the fullest extent permitted by law, any claims that the
Company may have against the Placement Agents with respect to any breach or
alleged breach of any fiduciary or similar duty to the Company in connection
with the transactions contemplated by this Agreement or any matters leading up
to such transactions.

     

    
      	
              Section
      13.

            	
              Headings.

            

    

     

    The
Section headings in this Agreement have been inserted as a matter of convenience
of reference and are not a part of this Agreement.

     

    
      	
              Section
    14.

            	
              Amendments and
      Waivers.

            

    

     

    No
supplement, modification or waiver of this Agreement shall be binding unless
executed in writing by the party to be bound thereby. The failure of a party to
exercise any right or remedy shall not be deemed or constitute a waiver of such
right or remedy in the future. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provision
hereof (regardless of whether similar), nor shall any such waiver constitute a
continuing waiver unless otherwise expressly provided.

     

    
      
         

      

      
        -28-

        
          

        

      

      
         

      

    

    
      	
              Section
    15.

            	
              Submission to
      Jurisdiction.

            

    

     

    Except as
set forth below, no Proceeding may be commenced, prosecuted or continued in any
court other than the state courts sitting in Cook County in the State of
Illinois and the federal courts in the Northern District of Illinois, which
courts shall have jurisdiction over the adjudication of such matters, and the
Company hereby consents to the jurisdiction of such courts and personal service
with respect thereto. The Company hereby consents to personal jurisdiction,
service and venue in any court in which any Proceeding arising out of or in any
way relating to this Agreement is brought by any third party against the
Placement Agents. The Company and the Placement Agents hereby waive all right to
trial by jury in any Proceeding (whether based upon contract, tort or otherwise)
in any way arising out of or relating to this Agreement. The Company and the
Placement Agents agree that a final judgment in any such Proceeding brought in
any such court shall be conclusive and binding upon such party and may be
enforced in any other courts in the jurisdiction of which such party is or may
be subject, by suit upon such judgment.

     

    
      	
              Section
    16.

            	
              Counterparts.

            

    

     

    This
Agreement may be executed in one or more counterparts and, if executed in more
than one counterpart, the executed counterparts shall each be deemed to be an
original and all such counterparts shall together constitute one and the same
instrument.  Delivery of an executed counterpart by facsimile shall be
effective as delivery of a manually executed counterpart thereof.

     

    
      
         

      

      
        -29-

        
          

        

      

      
         

      

    

    If the
foregoing is in accordance with your understanding of the agreement between the
Company and the Placement Agents, kindly indicate your acceptance in the space
provided for that purpose below.

     

    
      	 
      	 
      	
              Very
      truly yours,

            	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
              MERGE
      HEALTHCARE INCORPORATED

            	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
              By:

            	  
        	 
      
	 
      	 
      	 
      	
              Name:

            	 
      
	 
      	 
      	 
      	
              Title:

            	 
      
	 
      	 
      	 
      	 
      	 
      

    

    

    Accepted
as of

    the date
first above written:

     

    
      	
              WILLIAM
      BLAIR & COMPANY, L.L.C.

            	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
              By:

            	   
      	 
      
	 
      	
              Name:

            	 
      
	 
      	
              Title:

            	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
              CRAIG-HALLUM
      CAPITAL GROUP LLC

            	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
              By:

            	   
      	 
      
	 
      	
              Name:

            	 
      
	 
      	
              Title:

            	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
              ROBERT
      W. BAIRD & CO. INCORPORATED

            	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
              By:

            	   
      	 
      
	 
      	
              Name:

            	 
      
	 
      	
              Title:

            	 
      

    

     

    
      
         

      

      
        Signature
Page to Placement Agency Agreement  

        
          

        

      

      
         

      

    

    

    
      	
              Schedules and Exhibits

            
	 
      	 
      	 
      
	
              Schedule
      I:

            	 
      	
              Issuer
      General Free Writing Prospectuses

            
	 
      	 
      	 
      
	
              Schedule
      II:

            	 
      	
              List
      of Stockholders Executing Lock-Up Agreements

            
	 
      	 
      	 
      
	
              Exhibit
      A:

            	 
      	
              Form
      of Subscription Agreement

            
	 
      	 
      	 
      
	
              Exhibit
      B:

            	 
      	
              Pricing
      Information

            
	 
      	 
      	 
      
	
              Exhibit
      C:

            	 
      	
              Form
      of Lock-Up Agreement

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Schedule
I

    

    Issuer
General Free Writing Prospectuses

    

    

    (1)
Issuer Free Writing Prospectus, dated November 12, 2009, filed pursuant to Rule
433, relating to the Prospectus dated November 5, 2009 (Registration No.
333-161691)

    

    (2) Press
Release dated November 13, 2009 (see attached).

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Schedule
II

    

    List
of Stockholders Executing Lock-Up Agreements

    

    Michael
W. Ferro, Jr.

    Merrick
RIS, LLC

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit
A

    

    Form
of Subscription Agreement

    

    This
subscription (this “Subscription”) is
dated November __, 2009, by and between the investor identified on the signature
page hereto (the “Investor”) and Merge
Healthcare Incorporated, a Delaware corporation (the “Company”), whereby
the parties agree as follows:

     

    1.           Subscription.

    

    Investor
agrees to buy and the Company agrees to sell and issue to Investor such number
of shares (the “Shares”) of the
Company’s common stock, $0.01 par value per share (the “Common Stock”), as
set forth on the signature page hereto, for an aggregate purchase price (the
“Purchase
Price”) equal to the product of (x) the aggregate number of Shares the
Investor has agreed to purchase and (y) the purchase price per Share set forth
on the signature page hereto.  The Purchase Price is set forth on the
signature page hereto.

     

    The
Shares have been registered on a Registration Statement on Form S-3,
Registration No. 333-161691 (the “Registration
Statement”).  The Registration Statement has been declared
effective by the Securities and Exchange Commission (“SEC”) and is
effective on the date hereof.  A final prospectus supplement will be
delivered to the Investor as required by law.

     

    The
completion of the purchase and sale of the Shares (the “Closing”) shall take
place at a place and time (the “Closing Date”) to be
specified by the Company and the placement agents (the “Placement Agents”)
party to the Placement Agency Agreement, dated November 12, 2009 (the “Agreement”), in
accordance with Rule 15c6-1 promulgated under the Securities Exchange Act of
1934, as amended (the “Exchange
Act”).  Upon satisfaction or waiver of all the conditions to
closing set forth in the Agreement, at the Closing, (i) the Investor shall pay
the Purchase Price by wire transfer of immediately available funds to the
account designated by the Company on Annex A attached
hereto, and (ii) the Company shall cause the Shares to be delivered to the
Investor with the delivery of the Shares to be made through the facilities of
The Depository Trust Company’s DWAC system in accordance with the instructions
set forth on the signature page attached hereto under the heading “DWAC
Instructions”.

     

    2.           Company Representations and
Warranties.  The Company represents and warrants that: (a) it has
full corporate power and authority to enter into this Subscription and to
perform all of its obligations hereunder; (b) this Subscription has been duly
authorized and executed by, and when delivered in accordance with the terms
hereof will constitute a valid and binding agreement of, the Company enforceable
in accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
rights and remedies of creditors generally or subject to general principles of
equity; (c) the execution and delivery of this Subscription and the consummation
of the transactions contemplated hereby do not conflict with or result in a
breach of (i) the Company’s Certificate of Incorporation or Bylaws, or (ii) any
material agreement to which the Company is a party or by which any of its
property or assets is bound; (d) the Shares when issued and paid for in
accordance with the terms of this Subscription will be duly authorized, validly
issued, fully paid and non-assessable; (e) the Registration Statement and any
post-effective amendment thereto, at the time it became effective, did not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; (f) the prospectus contained in the Registration Statement, as
amended and/or supplemented, did not contain as of the effective date thereof,
and as of the date hereof does not contain, any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading; and (g) all preemptive rights or rights of first refusal held by
stockholders of the Company and applicable to the transactions contemplated
hereby have been duly satisfied or waived in accordance with the terms of the
agreements between the Company and such stockholders conferring such
rights.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3.           Investor Representations,
Warranties and Acknowledgments. 

     

    (a)           The
Investor represents and warrants that: (i) it has full right, power and
authority to enter into this Subscription and to perform all of its obligations
hereunder; (ii) this Subscription has been duly authorized and executed by the
Investor and, when delivered in accordance with the terms hereof, will
constitute a valid and binding agreement of the Investor enforceable against the
Investor in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights and remedies of creditors generally or subject to general
principles of equity; (iii) the execution and delivery of this Subscription and
the consummation of the transactions contemplated hereby do not conflict with or
result in a breach of (A) the Investor’s certificate of incorporation or by-laws
(or other governing documents), or (B) any material agreement or any law or
regulation to which the Investor is a party or by which any of its property or
assets is bound; (iv) it has had full access to the base prospectus included in
the Registration Statement, as amended and/or supplemented as of the date
hereof, and the Company’s periodic reports and other information incorporated by
reference therein, and was able to read, review, download and print such
materials; (v) in making its investment decision in this offering, the Investor
and its advisors, if any, have relied solely on the Company’s public filings
with the SEC; (vi) it is knowledgeable, sophisticated and experienced in making,
and is qualified to make, decisions with respect to investments in securities
representing an investment decision like that involved in the purchase of the
Shares; (vii) the Investor has had no position, office or other material
relationship within the past three years with the Company or persons known to it
to be affiliates of the Company; (viii), except as set forth below, the Investor
is not a, and it has no direct or indirect affiliation or association with any,
member of FINRA or an Associated Person (as such term is defined under the NASD
Membership and Registration Rules Section 1011) as of the date hereof; and (ix)
neither the Investor nor any group of Investors (as identified in a public
filing made with the SEC) of which the Investor is a part in connection with the
offering of the Shares, acquired, or obtained the right to acquire, 20% or more
of the Common Stock (or securities convertible into or exercisable for Common
Stock) or the voting power of the Company on a post-transaction
basis.

    

     

      
        

      

    

    (If no
exceptions, write “none.” If left blank, response will be deemed to be
“none.”)

    

    (b)           The
Investor also represents and warrants that, other than the transactions
contemplated hereunder, the Investor has not directly or indirectly, nor has any
person acting on behalf of or pursuant to any understanding with the Investor,
executed any transactions in securities of the Company, including “short sales”
as defined in Rule 200 of Regulation SHO under the Exchange Act (“Short Sales”), during
the period commencing from the time that the Investor first became aware of the
proposed transactions contemplated hereunder until the date hereof (the “Discussion
Time”).  The Investor has maintained the confidentiality of all
disclosures made to it in connection with this transaction (including the
existence and terms of this transaction).

    

    4.           Investor Covenant Regarding
Short Sales and Confidentiality.  The Investor covenants that
neither it nor any affiliates acting on its behalf or pursuant to any
understanding with it will execute any transactions in securities of the
Company, including Short Sales, during the period after the Discussion Time and
ending at the time that the transactions contemplated by this Subscription are
first publicly announced through a press release and/or Form 8-K.  The
Investor covenants that until such time as the transactions contemplated by this
Subscription are publicly disclosed by the Company through a press release
and/or Form 8-K, the Investor will maintain the confidentiality of all
disclosures made to it in connection with this transaction (including the
existence and terms of this transaction).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    5.           Miscellaneous.

    

    This
Subscription constitutes the entire understanding and agreement between the
parties with respect to its subject matter, and there are no agreements or
understandings with respect to the subject matter hereof which are not contained
in this Subscription.  This Subscription may be modified only in writing
signed by the parties hereto.

    

    This
Subscription may be executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument and shall become effective
when counterparts have been signed by each party and delivered to the other
parties hereto, it being understood that all parties need not sign the same
counterpart.  Execution may be made by delivery by facsimile.

    

    The
provisions of this Subscription are severable and, in the event that any court
or officials of any regulatory agency of competent jurisdiction shall determine
that any one or more of the provisions or part of the provisions contained in
this Subscription shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision or part of a provision of this Subscription
and this Subscription shall be reformed and construed as if such invalid or
illegal or unenforceable provision, or part of such provision, had never been
contained herein, so that such provisions would be valid, legal and enforceable
to the maximum extent possible, so long as such construction does not materially
adversely effect the economic rights of either party hereto.

    

    All
communications hereunder, except as may be otherwise specifically provided
herein, shall be in writing and shall be mailed, hand delivered, sent by a
recognized overnight courier service such as Federal Express, or sent via
facsimile and confirmed by letter, to the party to whom it is addressed at the
following addresses or such other address as such party may advise the other in
writing:

    

    To the
Company:  as set forth on the signature page hereto.

    

    To the
Investor:  as set forth on the signature page hereto.

    

    All
notices hereunder shall be effective upon receipt by the party to which it is
addressed.

    

    (e)           This
Subscription shall be governed by and interpreted in accordance with the laws of
the State of Illinois for contracts to be wholly performed in such state and
without giving effect to the principles thereof regarding the conflict of
laws.  To the extent determined by such court, the prevailing party shall
reimburse the other party for any reasonable legal fees and disbursements
incurred in enforcement of or protection of any of its rights under this
Subscription.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    If the
foregoing correctly sets forth our agreement, please confirm this by signing and
returning to us the duplicate copy of this Subscription.

     

    
      
        	 
      	 
      	 
      	 	
                 MERGE
      HEALTHCARE INCORPORATED

              
	 
      	 
      	 
      	 	 
      	 
      
	 
      	 
      	 
      	 	 
      	 
      
	 
      	 
      	 
      	 	 
      	 
      
	 
      	 
      	 
      	 	
                By:

              	 
      
	 
      	 
      	 
      	 	 
      	
                Name:

              
	 
      	 
      	 
      	 	 
      	
                Title:

              
	 
      	 
      	 
      	 	 
      	 
      
	 
      	 
      	 
      	 	 
      	 
      
	 
      	 
      	 
      	 	 
      	 
      
	
                Number of Shares:

              	 
      	 	 
      	
                Address for Notice:

              
	
                Purchase Price per Share:  $

              	 
      	 	 
      	
                 

              
	
                Aggregate Purchase Price: $

              	 
      	 	 
      	
                
                  Merge
      Healthcare Incorporated

                

              
	 
      	 
      	 
      	 	 
      	
                
                  6737
      West Washington Street, Suite 2250

                

              
	 
      	 
      	 
      	 	 
      	
                
                  Milwaukee,
      Wisconsin 53214-5650

                

              
	 
      	 
      	 
      	 	 
      	
                
                  Facsimile:
      (312) 984-7700

                

              
	 
      	 
      	 
      	 	 
      	Attention:
      Chief Executive Officer

      

       

       

       

      
        	
                INVESTOR:

              	 
      	 	 
      	 
      
	 
      	 
      	 
      	 	 
      	 
      
	
                By:

              	 
      	 	 
      	 
      
	 
      	Name:	
                 

              	 	 
      	 
      
	 
      	Title:	
                 

              	 	 
      	 
      
	 
      	 
      	 
      	 	 
      	 
      
	 
      	 
      	 
      	 	 
      	 
      
	
                DWAC Instructions:

              	 	 
      	 
      
	 
      	 
      	 
      	 	 
      	 
      
	
                Name
      of DTC Participant (broker-dealer at which the account or accounts to be
      credited with the Shares are maintained):

              	 	 
      	 
      
	 
      	 
      	 
      	 	 
      	 
      
	
                DTC
      Participant Number:

              	 	 
      	 
      
	 
      	 
      	 
      	 	 
      	 
      
	
                Name
      of Account at DTC Participant being credited with the
    Shares:

              	 	 
      	 
      
	 
      	 
      	 
      	 	 
      	 
      
	
                Account
      Number at DTC Participant being credited with the Shares:

              	 	 
      	 
      
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Annex
A

    

    Merge Healthcare
Incorporated Wire Instructions

    

    

     

    Silicon
Valley Bank

     

     

    3003
Tasman Drive

     

     

    Santa
Clara, CA 95054

     

     

    For Credit
to:

     

     

    Merge Healthcare
Incorporated

     

     

    Account
Number: 

     

     

    ABA
Number: 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit
B

    

    Pricing
Information

    

    

    
      	
              Number
      of Shares to be sold:

            	
               

            	
              9,084,032

            
	 
      	 
      	 
      
	
              Offering
      Price:

            	 
      	
              $3.00
      per Share

            
	 
      	 
      	 
      
	
              Aggregate
      Placement Fee:

            	 
      	
              $1,635,126

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit
C

    

    Form
of Lock-Up Agreement

    

    November
___, 2009

    

    

    William
Blair & Company, L.L.C.

    222 West
Adams

    Chicago,
IL 60606

    

    Craig-Hallum
Capital Group LLC

    222 South
Ninth Street, Suite 350

    Minneapolis,
MN 55402

    

    Robert W.
Baird & Co. Incorporated

    777 East
Wisconsin Avenue

    Milwaukee,
WI 53202

    

    Ladies
and Gentlemen:

    

    This
Lock-Up Agreement is being delivered to you in connection with the proposed
Placement Agency Agreement (the “Placement Agency
Agreement”) to be entered into by Merge Healthcare Incorporated, a
Delaware corporation (the “Company”), and
William Blair & Company, L.L.C., Craig-Hallum Capital Group LLC and Robert
W. Baird & Co. Incorporated (collectively, the “Placement Agents”),
with respect to the offering (the “Offering”) of shares
(the “Shares”)
of common stock, $0.01 par value per share (the “Common Stock”), of
the Company.

    

    In order
to induce you to enter into the Placement Agency Agreement, the undersigned
agrees that, for a period (the “Lock-Up Period”)
beginning on the date hereof and ending on, and including, the date that is 90
days after the date of the final prospectus supplement relating to the Offering,
the undersigned will not, without the prior written consent of the Placement
Agents, (i) sell, offer to sell, contract or agree to sell, hypothecate,
pledge, grant any option to purchase or otherwise dispose of or agree to dispose
of, directly or indirectly, or file (or participate in the filing of) a
registration statement with the Securities and Exchange Commission (the “Commission”) in
respect of, or establish or increase a put equivalent position or liquidate or
decrease a call equivalent position within the meaning of Section 16 of the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Commission promulgated thereunder (the “Exchange Act”) with
respect to, any Common Stock or any other securities of the Company that are
substantially similar to Common Stock, or any securities convertible into or
exchangeable or exercisable for, or any warrants or other rights to purchase,
the foregoing, (ii) enter into any swap or other arrangement that transfers
to another, in whole or in part, any of the economic consequences of ownership
of Common Stock or any other securities of the Company that are substantially
similar to Common Stock, or any securities convertible into or exchangeable or
exercisable for, or any warrants or other rights to purchase, the foregoing,
whether any such transaction is to be settled by delivery of Common Stock or
such other securities, in cash or otherwise or (iii) publicly announce an
intention to effect any transaction specified in clauses (i) or
(ii).

     

    The
restrictions set forth in the foregoing paragraph shall not apply to (a) the
registration of the offer and sale of the Shares as contemplated by the
Placement Agency Agreement and the sale of the Shares to the Investors (as
defined in the Placement Agency Agreement) in the Offering, (b) bona fide gifts,
provided the recipient thereof agrees in writing with the Placement Agents to be
bound by the terms of this Lock-Up Agreement, (c) dispositions to any trust for
the direct or indirect benefit of the undersigned and/or the immediate family of
the undersigned, provided that such trust agrees in writing with the Placement
Agents to be bound by the terms of this Lock-Up Agreement, (d) transfers of
Common Stock or securities convertible into Common Stock on death by will or
intestacy, (e) sales or transfers of Common Stock solely in connection with the
“cashless” exercise of Company stock options outstanding on the date hereof for
the purpose of exercising such stock options (provided that any remaining Common
Stock received upon such exercise will be subject to the restrictions provided
for in this Lock-Up Agreement) or (f) sales or transfers of Common Stock or
securities convertible into Common Stock pursuant to a sales plan entered into
prior to the date hereof pursuant to Rule 10b5-1 under the Exchange Act, a
copy of which has been provided to the Placement Agents.  In addition,
the restrictions sets forth herein shall not prevent the undersigned from
entering into a sales plan pursuant to Rule 10b5-1 under the Exchange Act
after the date hereof, provided that
(i) a copy of such plan is provided to the Placement Agents promptly upon
entering into the same and (ii) no sales or transfers may be made under
such plan until the Lock-Up Period ends or this Lock-Up Agreement is terminated
in accordance with its terms.  For purposes of this paragraph,
“immediate family” shall mean the undersigned and the spouse, any lineal
descendent, father, mother, brother or sister of the undersigned.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    In
addition, the undersigned hereby waives any rights the undersigned may have to
require registration of Common Stock in connection with the filing of a
registration statement relating to the Offering.  The undersigned
further agrees that, for the Lock-Up Period, the undersigned will not, without
the prior written consent of the Placement Agents, make any demand for, or
exercise any right with respect to, the registration of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock, or
warrants or other rights to purchase Common Stock or any such
securities.

     

    Notwithstanding
the above, if (a) during the period that begins on the date that is fifteen (15)
calendar days plus three (3) business days before the last day of the Lock-Up
Period and ends on the last day of the Lock-Up Period, the Company issues an
earnings release or material news or a material event relating to the Company
occurs, or (b) prior to the expiration of the Lock-Up Period, the Company
announces that it will release earnings results during the sixteen (16) day
period beginning on the last day of the Lock-Up Period, then the restrictions
imposed by this Lock-Up Agreement shall continue to apply until the expiration
of the date that is fifteen (15) calendar days plus three (3) business days
after the date on which the issuance of the earnings release or the material
news or material event occurs; provided, however, that this
paragraph shall not apply if (i) the safe harbor provided by Rule 139
under the Act is available in the manner contemplated by Rule 2711(f)(4) of
the Financial Industry Regulatory Authority, Inc. (“FINRA”) and
(ii) within the 3 business days preceding the 15th
calendar day before the last day of the Lock-Up Period, the Company delivers (in
accordance with Section 9 of the Placement Agency Agreement) to the Placement
Agents a certificate, signed by the Chief Financial Officer or Chief Executive
Officer of the Company, certifying on behalf of the Company that the Company’s
shares of Common Stock are “actively traded securities,” within the meaning of
Rule 2711(f)(4) of the NASD.

     

    The
undersigned hereby confirms that the undersigned has not, directly or
indirectly, taken, and hereby covenants that the undersigned will not, directly
or indirectly, take, any action designed, or which has constituted or will
constitute or might reasonably be expected to cause or result in the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    If
(i) the Company notifies you in writing that it does not intend to proceed
with the Offering, (ii) the registration statement filed with the
Commission with respect to the Offering is withdrawn, (iii) if the closing of
the Offering does not occur prior to ninety (90) days from the date of this
Lock-Up Agreement or (iv) for any reason the Placement Agency Agreement
shall be terminated prior to the Closing (as defined in the Placement Agency
Agreement), this Lock-Up Agreement shall be terminated and the undersigned shall
be released from its obligations hereunder.

     

    
      	 
      	 
      	
              Yours
      very truly,

            	 
      
	 
      	 
      	 
      	 
      
	 	 	 	 
	 
      	 
      	 
      	 
      
	 
      	 
      	
              Name:

            	 
      
	 
      	 
      	
              Title:

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