Exhibit 10.4

 

SEVERANCE AGREEMENT

 

This SEVERANCE AGREEMENT, (the “Agreement”) is made and entered into as of
March 13, 2009 (the “Effective Date”), by and between INFOLOGIX, INC., a
Delaware corporation (the “Company”), and CRAIG A. WILENSKY (“Executive”).

 

BACKGROUND

 

WHEREAS the Company provides enterprise mobility solutions to the healthcare,
pharmaceutical, retail, transportation, travel and entertainment, supply
chain/logistics, manufacturing and financial markets, which solutions include,
without limitation, designing, developing and manufacturing wireless
communication and computing devices, implementing customized RFID and other
software and proprietary technologies, and providing professional services that
support and complement customers’ wireless computing systems (the “Business”);
and

 

WHEREAS the Board of Directors of the Company (the “Board”) has determined that
it is in the best interests of the Company and its stockholders that the Company
attract, retain and motivate highly qualified management; and

 

WHEREAS the Board believes that the execution by the Company of severance
agreements with certain executive officers, including Executive, is an important
factor in achieving this desired end; and

 

WHEREAS Executive’s employment agreement with the Company expired effective
December 31, 2008 and the Company desires to continue Executive’s employment as
an executive officer of the Company on an “at will” basis and to provide
Executive with certain benefits in the event his employment with the Company is
terminated; and

 

WHEREAS Executive’s annual salary for services as an employee of the Company
(the “Base Salary”) will be $295,000 effective January 1, 2009; and

 

WHEREAS the Company and Executive each acknowledge and agree that the
confidentiality, noncompetition and nonsolicitation agreements and other
restrictive covenants contained in Section 4 (Restrictive Covenants) constitute
essential elements of this Agreement.

 

NOW THEREFORE, in consideration of the premises and the mutual covenants and
agreements contained in this Agreement and intending to be legally bound, the
parties hereto agree as follows:

 

SECTION 1.         TERM OF AGREEMENT

 

1.1          Term.  The term of this Agreement shall be two years commencing on
the Effective Date, as further extended or unless sooner terminated in
accordance with the other provisions of this Agreement (the “Term”).  Except as
hereinafter provided, on the second anniversary of the Effective Date and on
each subsequent anniversary thereof, the Term shall be automatically extended
for one year unless the Company provides Executive with written notice of

 

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termination of this Agreement at least 30 days prior to such anniversary,
provided, however, that (a) from and after a Separation from Service (as defined
below in Section 2.1 (Certain Definitions)) during the term of this Agreement,
this Agreement shall remain in effect until all of the obligations of the
parties hereunder are satisfied or have expired, and (b) this Agreement shall
terminate if Executive shall cease to be an executive officer of the Company.

 

1.2          No Entitlement.  Nothing contained in this Agreement shall be
construed to create a contract of employment for a specified time.  Executive is
employed on an “at will” basis and may be terminated at any time.

 

SECTION 2.         TERMINATION

 

2.1          Certain Definitions.  When used in this Agreement, the following
terms shall have the specific meanings shown in this Section unless the context
of any provision of this Agreement clearly requires otherwise:

 

(i)            “Change in Control” of the Company shall mean any of the
following events:

 

(A)          a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation resulting in the combined
voting power of the securities of the Company ordinarily (and apart from the
rights accruing under special circumstances) having the right to vote in the
general election of directors (calculated as provided in paragraph (d) of
Rule 13d-3 in the case of rights to acquire such securities) immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting stock of the surviving entity) more than a majority of the
combined voting power of the securities of the Company (or such surviving
entity) immediately after such merger or consolidation;

 

(B)           any sale, lease, exchange, or other transfer (in one transaction
or a series of related transactions) of all, or substantially all, of the assets
of the Company;

 

(C)           the dissolution and liquidation of the Company;

 

(D)          any person or “group” (other than a benefit plan sponsored by
either the Company or a subsidiary of the Company) becoming the “beneficial
owner,” directly or indirectly, of securities representing a majority of the
combined voting power of the then outstanding securities of the Company
ordinarily (and apart from the rights accruing under special circumstances)
having the right to vote in the election of directors (calculated as provided in
paragraph (d) of Rule 13d-3 in the case of rights to acquire such securities).

 

(E)           during any 12-month period, directors of the Company in office at
the beginning of such period ceasing for any reason to constitute a majority of
the Board, unless the election, or nomination for election by the Company’s
stockholders, of at least 75% of the directors who were not directors at the
beginning of such period was approved by vote of at least two-thirds of the
directors in office at the time of such election or nomination who were
directors at the beginning of such period.

 

For purposes hereof, the terms “group” and “beneficial owner” shall have the
meanings given to them in Rule 13d-3; and “Rule 13d-3” shall mean Rule 13d-3
under the Securities Exchange Act of

 

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1934.

 

(ii)           “Cause” shall mean the following:

 

(A)          commission of any act of fraud or dishonesty in connection with
Executive’s employment, or theft, misappropriation or embezzlement of the
Company’s funds;

 

(B)           indictment for any felony, crime involving fraud or
misrepresentation, or for any other crime (whether or not such felony or crime
is connected with Executive’s employment) the effect of which in the judgment of
the Board is likely to adversely affect the Company or its affiliates;

 

(C)           repeated and consistent failure of Executive to be present at work
during normal business hours unless the absence is because of Executive’s
Disability (as defined below);

 

(D)          violation of any lawful express direction of the Company or any
violation of any rule, regulation, policy or plan established by the Company
from time to time regarding the conduct of its employees and/or the Business, if
such violation is not remedied (if capable of remedy) by Executive within 15
days of receiving notice of such violation from the Company;

 

(E)           gross incompetence or willful misconduct in the performance of, or
gross neglect of, Executive’s duties under this Agreement or otherwise in the
performance of his employment with the Company (after not less than 15 days’
prior written notice specifying deficiencies in performance);

 

(F)           disclosure or use of Confidential Information, as defined in
Section 4.1 (Confidentiality), other than as required in the performance of
Executive’s employment with the Company; and

 

(G)           Executive’s use of alcohol or any unlawful controlled substance to
an extent that it interferes materially with the performance of Executive’s
employment with the Company.

 

(iii)          “Code” shall mean the Internal Revenue Code of 1986, as amended,
together with any applicable regulations thereunder.

 

(iv)          “Disability” shall mean the Executive is, in the reasonable
opinion of a physician selected by the Board, unable or substantially unable,
due to his physical, mental or emotional illness or condition, to substantially
perform his duties for a period of 16 consecutive weeks in any 18 month period
or is deemed disabled under the Company’s disability insurance policy then in
effect.

 

(v)           “Good Reason” shall mean any of the following actions without
Executive’s consent, other than due to Executive’s death or Disability:
(A) Executive’s assignment to a position, title, responsibilities, or duties of
a materially lesser status or degree of responsibility than the position,
responsibilities, or duties of the Company or removal from his position as an
executive officer of the Company, (B) the reduction of Executive’s base salary
or bonus opportunity, except

 

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pursuant to a reduction which also applies to the Company’s other senior
executives, (C) the requirement by the Company that Executive relocate
Executive’s primary office or location more than 25 miles from the Executive’s
then current primary office or location, or (D) the requirement that Executive
report to any officer of the Company other than its Chief Executive Officer;
provided, however, that Executive must have given written notice to the Company
that Executive believes he has the right to terminate employment for good
reason, specifying in reasonable detail the events comprising the good reason,
and the Company fails to eliminate the good reason within 15 days after receipt
of the notice.

 

(vi)          “Payment Date” shall mean the 75th day after Executive’s
Separation from Service, subject to Section 3.5 (Certain Section 409A Rules).

 

(vii)         “Separation from Service” shall mean Executive’s separation from
service with the Company and its affiliates within the meaning of Treas. Reg.
§1.409A-1(h) or any successor thereto.

 

(viii)        “Specified Employee” shall mean Executive if he is a specified
employee as defined in Section 409A of the Code as of the date of his Separation
from Service.

 

2.2          Entitlement to Severance Benefits.  Executive shall be entitled to
the benefits provided in this Agreement in the event the Executive has a
Separation from Service under the circumstances described in (i) through
(iii) below (a “Covered Termination”), provided that Executive executes, and
does not revoke, a full Release agreement in favor of the Company as described
below.  A Covered Termination shall have occurred in the event that:

 

(i)            Executive’s employment with the Company is terminated prior to a
Change in Control other than (A) by the Company for Cause, (B) by Executive, or
(C) due to Executive’s Disability; or

 

(ii)           Executive is not offered comparable employment by the Company’s
successor upon a Change in Control; or

 

(iii)          Executive’s employment with the Company or its successor
(referred to jointly as the “Company”) is terminated within 12 months following
a Change in Control other than (A) by the Company for Cause, (B) by Executive
without Good Reason, or (C) due to Executive’s Disability (a Covered
Terminations of the type described in items (ii) and (iii) shall be referred to
herein as a “Change in Control Termination”).

 

For purposes of this section, a “Release” shall mean a release (in substantially
the form attached hereto as Exhibit A) of any and all claims against the Company
and all related parties with respect to all matters arising out of Executive’s
employment by the Company and its affiliates, or the termination thereof (other
than claims for any entitlements under the terms of this Agreement). 
Notwithstanding any provision of this Agreement to the contrary, if the Company
provides a form of Release to Executive for Executive to sign, Executive shall
not be entitled to any payments or benefits under this Agreement unless
Executive signs and returns the Release to the Company before the lump-sum
payment is made to him; provided that, if the Release is not presented to
Executive within 10 days after Separation from Service, the requirement that
Executive sign the Release shall be waived.  If the Release is presented to
Executive within such 10-day period, but Executive does not sign and return the
Release to the Company by the end of the applicable consideration period

 

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under the federal Age Discrimination in Employment Act (currently, either 21 or
45 calendar days), then Executive shall forfeit the lump-sum payment.  If the
Release is timely signed and returned to the Company and not thereafter revoked,
such lump-sum payment shall be made to Executive on the Payment Date.

 

2.3          Severance Payment.  In the event of a Covered Termination,
Executive shall be entitled to receive a severance amount (the “Severance
Amount”) equal to the sum of:

 

(a)           an amount equal to the Executive’s Base Salary as of the date of
the Covered Termination (the “Termination Date”); and,

 

(b)           in addition to the amount payable under Section 2.3(a) hereof,
(i) in the event of a Change in Control Termination, in addition to the amount
payable under Section 2.3(a) hereof, an amount equal to the maximum annual
incentive cash bonus at the rate in effect as of the Termination Date, or
(ii) other than in the event of a Change in Control Termination, an amount equal
to the pro rata portion of the maximum annual incentive cash bonus at the rate
in effect as of the Termination Date, which shall be calculated based on a
numerator equal to the number of days between January 1 and the date of the
Covered Termination and a denominator of 365.

 

Executive will also be entitled to the benefits and payments referred to in
Sections 3.1 (Welfare Benefits) and 3.3 (Other Payments and Benefits).  The
Severance Amount shall be deposited into a third-party escrow account within 10
days of the Termination Date and paid to Executive in a lump-sum on the Payment
Date.

 

2.4          Vesting of Equity Compensation.  In the event of a Covered
Termination, and notwithstanding any provision to the contrary in any of the
Company’s equity compensation plans, all of Executive’s outstanding equity
compensation awards shall become fully vested and exercisable as of the
Termination Date.

 

SECTION 3.         BENEFITS FOLLOWING TERMINATION

 

3.1          Welfare Benefits.  Subject to Section 3.2 (Effect of Other
Employment), for a period of up to 18 months following a Covered Termination of
Executive, Executive and Executive’s dependents shall be entitled to participate
in the Company’s medical and dental insurance plans at Executive’s expense, in
accordance with the terms of such plans at the time of such Covered Termination
as if Executive were still employed by the Company or its affiliates under this
Agreement.  The continued coverage provided to Executive under this Section 3.1
shall meet the requirements for COBRA health care continuation coverage, and the
COBRA health care continuation coverage period under section 4980B of the Code
shall run concurrently with the period of continued health coverage following
the Termination Date.

 

3.2          Effect of Other Employment.  In the event Executive becomes
employed during the period with respect to which benefits are continuing
pursuant to Section 3.1 (Welfare Benefits):  (a) Executive shall notify the
Company not later than the day such employment commences; and (b) the benefits
provided for in Section 3.1 (Welfare Benefits) shall terminate as of the date of
such employment.  Nothing herein shall relieve the Company of its obligations
for compensation or benefits accrued up to the time of termination provided for
herein.

 

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3.3          Other Payments and Benefits.  On the Payment Date, the Company
shall pay or cause to be paid to Executive his earned but unpaid Base Salary and
accrued vacation through the Termination Date.  Executive shall be entitled to
receive any other payments or benefits to which he is entitled pursuant to the
express terms of any plan, policy or arrangement of the Company, provided that
the Severance Amount (i) shall be in lieu of any severance payments to which
Executive might otherwise be entitled and (ii) shall be credited against any
severance payments to which Executive may be entitled by statute.

 

3.4          Death After Covered Termination.  In the event Executive dies after
a Covered Termination occurs, (a) any payments due to Executive under Section 2
(Termination)  and Section 3.3 (Other Payments and Benefits) and not paid prior
to Executive’s death shall be made to the person or persons who may be
designated by Executive in writing or, in the event he fails to so designate, to
Executive’s personal representatives, and (b) Executive’s spouse and dependents
shall continue to be eligible for the welfare benefits described in Section 3.1
(Welfare Benefits).  Payments pursuant to subsection (a) above shall be made on
the date payment would have been made to Executive without regard to Section 3.5
(Certain Section 409A Rules).

 

3.5          Certain Section 409A Rules.

 

(a)           Specified Employee.  Notwithstanding any provision of this
Agreement to the contrary, if Executive is a Specified Employee, any payment or
benefit under this Agreement that constitutes deferred compensation subject to
Section 409A of the Code and for which the payment event is Separation from
Service shall not be made or provided for before the date that is six months
after the date of Executive’s Separation from Service.  Any payment or benefit
that is delayed pursuant to this Section 3.5 shall be made or provided on the
first business day of the seventh month following the month in which Executive’s
Separation from Service occurs.  With respect to any cash payment delayed
pursuant to this Section 3.5, the first payment shall include interest, at the
Wall Street Journal Prime Rate published in the Wall Street Journal on the date
of the Separation of Service (or the previous business day if such date is not a
business day), for the period from the date the payment would have been made but
for this Section3.5 through the date payment is made.  The provisions of this
Section 3.5 shall apply only to the extent required to avoid Executive’s
incurrence of any additional tax or interest under Section 409A of the Code.

 

(b)           Reimbursement and In-Kind Benefits.  Notwithstanding any provision
of this Agreement to the contrary, with respect to in-kind benefits provided or
expenses eligible for reimbursement under this Agreement that are subject to
Section 409A of the Code, (i) the benefits provided or the amount of expenses
eligible for reimbursement during any calendar year shall not affect the
benefits provided or expenses eligible for reimbursement in any other calendar
year, except as otherwise provided in Treas. Reg. §1.409A-3(i)(1)(iv)(B), and
(ii) the reimbursement of an eligible expense shall be made as soon as
practicable after Executive requests such reimbursement (subject to
Section 3.5(a)), but not later than the December 31 following the calendar year
in which the expense was incurred.

 

(c)           Interpretation and Construction.  This Agreement is intended to
comply with Section 409A of the Code and shall be administered, interpreted and
construed in accordance therewith to avoid the imposition of additional tax
under Section 409A of the Code.

 

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3.6          Limitation on Payment Obligation.

 

(a)           Definitions.  For purposes of this Section 3.6, all terms
capitalized but not otherwise defined herein shall have the meanings as set
forth in Section 280G of the Code.  In addition:

 

(i)            the term “Parachute Payment” shall mean a payment described in
Section 280G(b)(2)(A) or Section 280G(b)(2)(B) of the Code (including, but not
limited to, any stock option rights, stock grants, and other cash and noncash
compensation amounts that are treated as payments under either such section) and
not excluded under Section 280G(b)(4)(A) or Section 280G(b)(6) of the Code;

 

(ii)           the term “Reasonable Compensation” shall mean reasonable
compensation for prior personal services as defined in Section 280G(b)(4)(B) of
the Code and subject to the requirement that any such reasonable compensation
must be established by clear and convincing evidence; and

 

(iii)          the portion of the “Base Amount” and the amount of “Reasonable
Compensation” allocable to any “Parachute Payment” shall be determined in
accordance with Section 280G(b)(3) and (4) of the Code.

 

(b)           Limitation.  Notwithstanding any other provision of this
Agreement, Parachute Payments to be made to or for the benefit of Executive but
for this subsection (b), whether pursuant to this Agreement or otherwise, shall
be reduced if and to the extent necessary so that the aggregate Present Value of
all such Parachute Payments shall be at least one dollar ($1.00) less than the
greater of (i) three times Executive’s Base Amount and (ii) the aggregate
Reasonable Compensation allocable to such Parachute Payments.  Any reduction in
Parachute Payments caused by reason of this subsection (b) shall be applied in
the manner least economically detrimental to Executive.  In the event reduction
of two or more types of payments would be economically equivalent, the reduction
shall be applied pro-rata to such types of payments.

 

This subsection (b) shall be interpreted and applied to limit the amounts
otherwise payable to Executive under this Agreement or otherwise only to the
extent required to avoid any material risk of the imposition of excise taxes on
Executive under Section 4999 of the Code or the disallowance of a deduction to
the Company under Section 280G(a) of the Code.  In the making of any such
interpretation and application, Executive shall be presumed to be a disqualified
individual for purposes of applying the limitations set forth in this subsection
(b) without regard to whether or not Executive meets the definition of
disqualified individual set forth in Section 280G(c) of the Code.  In the event
that Executive and the Company are unable to agree as to the application of this
subsection (b), the Company’s independent auditors shall select independent tax
counsel to determine the amount of such limits.  Such selection of tax counsel
shall be subject to Executive’s consent, provided that Executive shall not
unreasonably withhold his consent.  The determination of such tax counsel under
this Section 3.6 shall be final and binding upon Executive and the Company.

 

(c)           Illegal Payments.  Notwithstanding any other provision of this
Agreement, no payment shall be made hereunder to or for the benefit of Executive
if and to the extent that such payments are determined to be illegal.

 

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SECTION 4.         RESTRICTIVE COVENANTS

 

4.1          Confidentiality.

 

(a)           Executive shall not, either during or after his employment with
the Company, directly or indirectly use, publish or otherwise disclose or
divulge to any third party any Confidential Information other than as required
by law or except as may be necessary in the performance of Executive’s
employment with the Company.  Executive will comply with all policies generally
applicable to Company employees then in effect, including, without limitation,
confidentiality policies, security and access policies and other comparable
policies.  The Company may amend these policies from time to time upon
reasonable notice to Executive.  As used in this Agreement, “Confidential
Information” shall mean all Intellectual Property and all confidential and
proprietary information, technical data, trade secrets or know-how of the
Company, including, without limitation, any information concerning customers
(including customer lists), vendors, services, products, product plans,
processes, designs, research, developments, inventions, formulas, technology,
drawings, engineering, hardware configuration information, pricing policies,
business plans or records, any technical or financial information or data, any
information relating to the history or prospects of the Company or any of its
stockholders, or other business information disclosed to Executive by the
Company either directly or indirectly in writing, orally or by drawings or
Executive’s observation of parts or equipment, unpublished information and all
information and data that is not generally known by the industry.

 

(b)           Executive shall not, either during or after his employment with
the Company, directly or indirectly copy, reproduce or remove from the Company’s
premises, except as may be necessary in the performance of Executive’s
employment with the Company, any Confidential Information (in any medium) or any
Company documents, files or records (including, without limitation, any
invoices, customer correspondence, business cards, orders, computer records or
software, or mailing, telephone or customer lists).  All such documents, files
and records, and all other memoranda, notes, files, records, lists and other
documents made, compiled or otherwise acquired by Executive in the course of his
employment with the Company are and shall remain the sole property of the
Company and all originals and copies thereof shall be delivered to the Company
upon termination of employment for whatever reason.

 

4.2          Inventions and Improvements.  Executive hereby assigns, and agrees
to assign (when first reduced to practice or first fixed in a tangible medium,
as applicable), to the Company all of Executive’s right, title and interest (to
the extent not already owned by the Company as a work for hire or otherwise),
without further consideration, free from any claim, lien for balance due, or
rights of retention, in and to and any all Intellectual Property.  “Intellectual
Property” means all patents, trademarks, copyrights, and trade secrets,
including without limitation, writings, inventions, improvements, processes,
procedures, ideas and/or techniques, whether or not patentable or registerable
under copyright or similar statutes, which Executive may have made, conceived,
discovered, developed, learned or reduced to practice, or which Executive may
make, conceive, discover, develop, learn or reduce to practice, either solely or
jointly with any other person or persons, at any time during his employment with
the Company, whether or not during working hours and whether or not at the
request or upon the suggestion of the Company, which (i) are related or relate
to or are useful in connection with any business previously, now or hereafter
carried on or contemplated by the Company, including developments or expansions
of its present fields of operations, (ii) resulted or result from any work
performed by Executive for the Company or any of its clients; or (iii) resulted
or result from the use of the premises or personal property (whether

 

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tangible or intangible) owned, leased, or contracted for by the Company, in each
case whether or not the Intellectual Property was reduced to drawing, written
description, documentation, models or other tangible form, or is related to the
general line of business engaged in by the Company.  Executive acknowledges that
any Intellectual Property relating to Executive’s activities while working for
the Company and that Executive has, solely or jointly with any other person or
persons, conceived, developed or reduced to practice or caused to be conceived,
developed or reduced to practice within 12 months after termination of
Executive’s employment with the Company may have been conceived in significant
part while employed by the Company.  Accordingly, Executive agrees that such
Intellectual Property shall be presumed to have been conceived during
Executive’s employment with the Company and is to be assigned to the Company in
accordance with this Agreement unless and until Executive has established the
contrary.  Executive acknowledges that all Intellectual Property that is an
original work of authorship made by Executive (solely or jointly with any other
person or persons) in the course of Executive’s employment and is protectable by
copyright shall be owned exclusively by the Company as a “work made for hire”
within the meaning of the Copyright Act of 1976, as amended (the “Act”). 
Executive agrees that he shall make full disclosure to the Company of all such
writings, inventions, improvements, processes, procedures and techniques, and
shall do everything necessary or desirable to vest, and from time to time
enforce, the absolute title thereto in the Company.  Executive’s obligations to
assist the Company shall include, without being limited to, Executive’s writing
and preparation of all specifications and procedures regarding such inventions,
improvements, processes, procedures and techniques, and otherwise aiding and
assisting the Company so that the Company can prepare and present applications
for copyright or letters patent therefor and can secure such copyright or
wherever possible, continuations, continuations-in-part, divisionals, reissues,
renewals, and extensions thereof, and can obtain the record title to such
copyright or patents so that the Company shall be the sole and absolute owner
thereof in all countries in which it may desire to have copyright or patent
protection. Executive’s obligations to assist Company shall survive termination
of this Agreement and continue until the expiration of the last available
protection obtained on the Intellectual Property developed during the
Executive’s term of employment. Executive shall not be entitled to any
additional or special compensation or reimbursement regarding any and all such
writings, inventions, improvements, processes, procedures and techniques.  If
the Company is unable, after reasonable effort, to obtain Executive’s full
cooperation and secure Executive’s signature on any document needed in
connection with the actions specified in this Section, whether because of
Executive’s physical or mental incapacity or for any other reason whatsoever,
Executive hereby irrevocably designates and appoints the Company and its duly
authorized officers and agents as Executive’s agent and attorney-in-fact, to act
for Executive and on his behalf to execute, verify and file any such documents
and to do all other lawfully permitted acts to further the purposes of this
Section with the same legal force and effect as if personally executed by
Executive.  Executive hereby waives and quitclaims to the Company any and all
claims, of any nature whatsoever, which Executive now or may hereafter have for
infringement of any Intellectual Property assigned or to be assigned hereunder
to the Company.

 

4.3          Noncompetition and Nonsolicitation.  During the Term and for one
year after any termination of Executive’s employment for any reason, Executive
shall not, for his own benefit or the benefit of any other person or entity,
directly or indirectly, in any capacity (as an employee, officer, director,
shareholder, partner, agent, principal, independent contractor, owner or
otherwise) (i) engage in or be financially interested in any business operation
in the United States that engages in whole or in part (A) in the Business or
(B) in the manufacture, assembly, design, distribution or marketing of any
product or equipment substantially similar to or in competition with any product
or equipment that at any time during the Term or the immediately preceding
twelve month period has been manufactured, sold or distributed by the Company or
any product or

 

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equipment that the Company was developing during the Term or such twelve month
period for future manufacture, sale or distribution or the provision of any
service substantially similar to or in competition with any service offered by
the Company at any time during the Term or such twelve month period or that the
Company was developing during the Term or such twelve month period;
(ii) solicit, or attempt to solicit  any customer of the Company; (iii) solicit,
or contact with a view to the engagement or employment by, or hire any person or
entity of any person who is an employee of the Company; (iv) seek to contract
with or engage (in such a way as to adversely affect or interfere with the
business of the Company) any person or entity who has been contracted with or
engaged to manufacture, assemble, supply or deliver products, goods, materials
or services to the Company; or (v) engage in or participate in any effort or act
to induce any of the customers, associates, consultants or employees of the
Company or any of its affiliates to take any action that might be
disadvantageous to the Company or any of its affiliates; except that nothing in
this Agreement shall prohibit Executive and his affiliates from owning, as
passive investors, in the aggregate not more than 5% of the outstanding publicly
traded stock of any corporation so engaged.  The duration of Executive’s
covenants set forth in this Section shall be extended by a period of time equal
to the number of days, if any, during which Executive is in violation of the
provisions contained in this Agreement.

 

4.4          Injunctive and Other Relief.

 

(a)           Executive acknowledges that the covenants contained in this
Agreement are fair and reasonable in light of the consideration paid under this
Agreement, and that damages alone shall not be an adequate remedy for any breach
by Executive of any provision of this Section 4, and accordingly expressly
agrees that, in addition to any other remedies that the Company may have, the
Company shall be entitled to injunctive relief in any court of competent
jurisdiction for any breach or threatened breach by Executive of any of the
covenants set forth in this Agreement.  Nothing contained in this Agreement
shall prevent or delay the Company from seeking, in any court of competent
jurisdiction, specific performance or other equitable remedies in the event of
any breach or intended breach by Executive of any of his obligations under this
Agreement.

 

(b)           Notwithstanding the equitable relief available to the Company,
Executive, in the event of a breach of his covenants contained in this
Section 4, understands that the uncertainties and delays inherent in the legal
process would result in a continuing breach for some period of time, and
therefore, continuing injury to the Company until and unless the Company can
obtain such equitable relief.  Therefore, in addition to such equitable relief,
the Company shall be entitled to monetary damages for any such period of breach
until the termination of such breach, in an amount deemed reasonable to cover
all actual and consequential losses, plus all monies received by Executive as a
result of said breach.  If Executive should use or reveal to any other person or
entity any Confidential Information, it will be considered a continuing
violation on a daily basis for so long a period of time as such Confidential
Information used by Executive or any such other person or entity.

 

(c)           Executive agrees that the territorial and time limitations set
forth in this Section 4 are reasonable and properly required for the adequate
protection of the business of the Company and that in the event that any such
territorial or time limitation is deemed to be unreasonable by a court of
competent jurisdiction, then Executive agrees and submits to the reduction of
either such territorial or time limitation to such an area or period as such
court shall deem reasonable.

 

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SECTION 5.       MISCELLANEOUS

 

5.1                               Arbitration.

 

(a)                                  All disputes arising out of or relating to
this Agreement that cannot be settled by the parties shall promptly be submitted
to and determined by a single arbitrator in Montgomery County, Pennsylvania,
pursuant to the rules and regulations then existing of the American Arbitration
Association; but nothing in this Agreement shall preclude the Company from
seeking, in any court of competent jurisdiction, damages, specific performance
or other equitable remedies in the case of any breach or threatened breach by
Executive of Section 4 (Restrictive Covenants).  The decision of the arbitrator
shall be final and binding upon the parties, and judgment upon such decision may
be entered in any court of competent jurisdiction.

 

(b)                                 Discovery shall be allowed pursuant to the
intendment of the United States Federal Rules of Civil Procedure and as the
arbitrators determine appropriate under the circumstances.

 

(c)                                  The arbitrator shall be required to apply
the contractual provisions of this Agreement in deciding any matter submitted to
it and shall not have any authority, by reason of this Agreement or otherwise,
to render a decision that is contrary to the mutual intent of the parties as set
forth in this Agreement.

 

5.2                               Severability.  The invalidity or
unenforceability of any particular provision or part of any provision of this
Agreement shall not affect the other provisions or parts of this Agreement.  If
any provision of this Agreement is determined to be invalid or unenforceable by
a court of competent jurisdiction by reason of the duration or geographical
scope of the covenants contained in this Agreement, such duration or
geographical scope, or both, shall be considered to be reduced to a duration or
geographical scope to the extent necessary to cure such invalidity.

 

5.3                               Assignment.

 

(a)                                  This Agreement is personal to Executive and
shall not be assignable by Executive, by operation of law or otherwise, without
the prior written consent of the Company other than by will or the laws of
descent and distribution.  This Agreement shall inure to the benefit of
Executive’s heirs and legal representatives.

 

(b)                                 This Agreement shall inure to the benefit of
and be binding upon the Company and its successors and assigns, including,
without limitation, any subsidiary of the Company to which the Company may
assign any of its rights hereunder.

 

(c)                                  The Company shall require any successor
(whether direct or indirect, by purchase, merger, consolidation, operation of
law, or otherwise) to all or substantially all of the business and/or assets of
the Company to assume expressly and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such succession had taken place, but, irrespective of any such assignment
or assumption, this Agreement shall inure to the benefit of, and be binding
upon, such a successor.

 

5.4                               Notices.  All notices, consents, waivers, and
other communications required or permitted by this Agreement shall be in writing
and shall be deemed given to a party when (a)

 

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delivered to the appropriate address by hand or by nationally recognized courier
service (costs prepaid); (b) sent by facsimile with confirmation of transmission
by the transmitting equipment; or (c) received or rejected by the addressee, if
sent by certified mail, return receipt requested; in each case to the following
addresses or facsimile numbers and marked to the attention of the person (by
name or title) designated below (or to such other address or facsimile number,
or person as a party may designate in writing to the other parties):

 

(a)

 

If to the Company:

 

 

 

 

 

InfoLogix, Inc.

 

 

101 E. County Line Road

 

 

Suite 210

 

 

Hatboro, PA 19040

 

 

Tel: (215) 604-0691

 

 

Fax: (267) 681-0682

 

 

 

 

 

Attention: Chief Financial Officer

 

 

 

(b)

 

If to Executive:

 

 

 

 

 

[                                                        ]

 

A copy of any and all notices and other communications sent by facsimile
pursuant to this Section5.4 shall also be sent by United States mail to the
appropriate address in accordance with this Section 5.4.

 

5.5                               Entire Agreement and Modification.  This
Agreement constitutes the entire agreement between the parties with respect to
the matters contemplated in this Agreement and supersedes all prior agreements
and understandings with respect to those matters.  Any amendment, modification,
or waiver of this Agreement shall not be effective unless in writing.  Neither
the failure nor any delay on the part of any party to exercise any right,
remedy, power or privilege shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, remedy, power or privilege preclude any
other or further exercise of the same or of any other right, remedy, power, or
privilege with respect to any occurrence be construed as a waiver of any right,
remedy, power, or privilege with respect to any other occurrence.

 

5.6                               Withholding.  Notwithstanding any provision of
this Agreement to the contrary, the Company may, to the extent required by law,
withhold applicable Federal, state and local income and other taxes from any
payment to Executive hereunder.

 

5.7                               Governing Law.  This Agreement is made
pursuant to, and shall be construed and enforced in accordance with, the
internal laws of the Commonwealth of Pennsylvania (and United States federal
law, to the extent applicable), without giving effect to otherwise applicable
principles of conflicts of law of that or any other jurisdiction.

 

5.8                               Headings; Counterparts.  The headings of
paragraphs in this Agreement are for convenience only and shall not affect its
interpretation.  This Agreement may be executed in two or more counterparts,
each of which shall be deemed to be an original and all of which, when taken
together, shall be deemed to constitute but one and the same Agreement.

 

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5.9                               Further Assurances.  Each of the parties shall
execute such further instruments and take such other actions as any other party
shall reasonably request in order to effectuate the purposes of this Agreement.

 

5.10                        Waiver.  Neither the failure nor any delay on the
part of either party to exercise any right, remedy, power or privilege under
this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power or privilege preclude any other or
further exercise of the same or of any other right, remedy, power or privilege,
nor shall any waiver of any right, remedy, power or privilege with respect to
any occurrence be construed as a waiver of such right, remedy, power or
privilege with respect to any other occurrence.

 

5.11                        Survival.  The terms and conditions contained in
Section 4 (Restrictive Covenants) shall survive the termination or expiration of
this Agreement.

 

5.12                        Previous Agreements.  By entering into this
Agreement, the parties agree that any previous agreements or understandings
regarding Executive in connection with a change in control be terminated.

 

5.13                        Indemnification.  Executive shall be covered by the
Company’s directors and officers liability insurance policies and
indemnification policies on the same terms and conditions as apply to the
Company’s other senior executives.

 

[signature page follows]

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

 

 

 

INFOLOGIX INC.

 

 

 

 

 

 

 

 

By:

/s/ David T. Gulian

 

 

 

Name: David T. Gulian

 

 

 

Title: Chief Executive Officer/President

 

 

 

 

 

 

 

 

/s/ Craig A. Wilensky

 

 

Craig A. Wilensky

 

 

Executive

 

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Exhibit A

 

FORM OF RELEASE

 

This GENERAL RELEASE (“Release”) is made and entered into by and between
INFOLOGIX, INC. (the “Company”) and [                      ] (“Executive”).

 

WHEREAS Executive’s employment with the Company has terminated; and

 

WHEREAS pursuant to the Severance Agreement by and between the Company and the
Executive dated [                          ] (the “Agreement”), the Company has
agreed to pay Executive certain amounts and to provide him with certain rights
and benefits, subject to the execution of this Release.

 

NOW, THEREFORE, in consideration of these premises and the mutual promises
contained herein, and intending to be legally bound, the parties agree as
follows:

 

1.                                       Termination Date.  Executive’s
employment with the Company has concluded permanently and irrevocably effective
[                        ] (“Termination Date”).

 

2.                                       Good and Valuable Consideration / No
Further Payment.  Executive acknowledges that the payments, rights and benefits
set forth in Sections 2.3, 2.4, 3.1 and 3.3 of the Agreement constitute full and
final settlement of all his rights under the Agreement and, except as otherwise
provided in this Release, the Company does not and will not have any other
liability or obligation to the Executive.  The Executive further acknowledges
that, in the absence of the execution of this Release, the benefits and payments
specified in Sections 2.3, 2.4 and 3.1 of the Agreement would not otherwise be
due him.

 

3.                                       Restrictive Covenants.  Executive
acknowledges that the restrictive covenants contained in Section 4 of the
Agreement will survive the termination of his employment.  Executive affirms
that those restrictive covenants are reasonable and necessary to protect the
legitimate interests of the Company and that he received adequate consideration
in exchange for agreeing to those restrictions and he will abide by those
restrictions.

 

4.                                       General Release.  In consideration of
the payments, rights and benefits referred to in Paragraph 2 hereof and
intending to be legally bound, Executive hereby irrevocably and unconditionally
releases and forever discharges the Company and any and all of its parents,
subsidiaries, affiliates, related entities, and each of its and their
predecessors, successors, customers, insurers, owners, directors, officers,
employees, attorneys, and other agents (“Released Parties”) of and from any and
all rights, obligations, promises, agreements, debts, losses, controversies,
claims, causes of action, liabilities, damages, and expenses, including without
limitation attorneys’ fees and costs, of any nature whatsoever, whether known or
unknown, asserted or unasserted, which he ever had, now has, or hereafter may
have against the Released Parties, or any of them, that arose at any time before
or upon his signing this Release, including without limitation the right to take
discovery with respect to any matter, transaction, or occurrence existing or
happening at any time before or upon his signing this Release and any and all
claims arising under any oral or written Company

 

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program, policy or practice, contract, agreement or understanding (except this
Release), any common-law principle of any jurisdiction, any federal, state or
local statute or ordinance, with all amendments thereto, including without
limitation the Civil Rights Acts of 1866, 1871, 1964, and 1991, the Equal Pay
Act, the Age Discrimination in Employment Act of 1967, the Fair Credit Reporting
Act, the Employee Retirement Income Security Act of 1974, the Americans With
Disabilities Act of 1990, the Family and Medical Leave Act of 1993, the Health
Insurance Portability and Accountability Act of 1996, the Pennsylvania Human
Relations Act and any other employee-protective law of any jurisdiction that may
apply.

 

5.                                       Non-Disparagement.  Executive will not
disparage any Released Person or otherwise take any action which could
reasonably be expected to adversely or affect the personal or professional
reputation of any released person.

 

6.                                       Confidentiality.  Executive agrees
that, except in an action for breach of this Release, the terms of this Release
shall not be disclosed or introduced or used in any future proceedings. 
Executive agrees that he shall keep the terms of this Release STRICTLY
CONFIDENTIAL and that he shall not disclose them to any person other than his
immediate family and his current or future attorneys, accountants or tax
advisors, each of whom shall agree before any such disclosure to be bound by
this confidentiality provision.

 

7.                                       Good Faith Settlement.  This Release
constitutes the good faith compromise and settlement of all claims and potential
claims Executive has against any one or more of the Released Parties and is not
and shall not be construed as an admission of any wrongful or unlawful act
against Executive or that the conclusion of Executive’s employment was in any
way wrongful or unlawful.

 

8.                                       Knowing and Voluntary Agreement. 
Executive acknowledges that he received this Release on
[                                    ]; that the Company advised him in writing,
by this Paragraph, to consult with an attorney before signing this Release; that
the Company is providing him with no less than 21 days to consider this Release
before signing it; that the Company is providing him with no less than 7 days to
revoke this Release after signing it, if he chooses to do so; that Executive
carefully read and fully understands all of the provisions and effects of this
Release; that Executive is entering into this Release voluntarily and free of
coercion and duress; and that neither the Company nor any of its agents or
attorneys made any representations or promises concerning the terms or effects
of this Release.

 

9.                                       No Right to Relief.  Executive shall
have no right to obtain or receive any money damages, injunctive or other relief
through any lawsuit, complaint, action or proceeding commenced or maintained in
any court, agency or other forum by him or any person or entity on his behalf
with respect to any act, omission, claim or other matter that is covered by
Paragraph 4 of this Release.  If Executive violates or challenges the
enforceability of any provisions of the Restrictive Covenants or this Release,
no further payments, rights or benefits under Sections 2.3, 2.4 and 3.1 of the
Agreement will be due to Executive.

 

10.                                 Governing Law.  This Release shall in all
respects be interpreted, enforced, and governed under the laws of the
Commonwealth of Pennsylvania, without reference to the principles of conflicts
of law otherwise applicable therein.

 

2

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11.                                 Entire Agreement.  Except as otherwise
provided herein, this Release sets forth the entire agreement between the
parties and fully supersedes any and all written or oral contracts, agreements
or understandings between the parties pertaining to the subject matter hereof.

 

3

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IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties have
executed this General Release.

 

 

 

INFOLOGIX, INC.

 

 

 

 

 

 

 

 

By:

 

Date:

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

 

Date

 

[                                                             ]

 

 

Executive

 

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