Exhibit 10.1

TRANSITION AGREEMENT

This Transition Agreement (the “Agreement”) is made and entered into as of the
29th day of September 2006 by and between Innodata Isogen, Inc. (“Innodata
Isogen”) and Stephen Agress (“Agress”).

1)
Recitals. This Agreement is made with reference to the following facts:

 
a)
Agress has been employed full-time by Innodata Isogen as its Vice President,
Finance and Chief Accounting Officer.

 
b)
Innodata Isogen and Agress have agreed that, effective as of September 30, 2006
(the “Transition Date”), Agress will resign his position as an Executive Officer
(which includes his positions as Vice President, Finance and Chief Accounting
Officer), and will transition to a part-time employee as more fully set forth
below.

2)
Transition Services.

 
a)
Effective as of the Transition Date Agress shall provide to Innodata Isogen
transition services (the “Transition Services”) for a period commencing on the
Transition Date and ending on December 31, 2006 (the “Transition Period”). The
Transition Period may be extended by Innodata Isogen, in its sole option, for an
additional period from January 1, 2007 through March 31, 2007 (the “Extended
Transition Period”). Innodata Isogen may not terminate Agress’ employment during
the Transition Period.

 
b)
Agress shall be employed by Innodata Isogen as a part-time employee while
providing the Transition Services, and shall provide to Innodata Isogen
approximately 40-45 hours per month of Transition Services during the Transition
Period, and approximately 20-25 hours per month of Transition Services during
the Extended Transition Period, if any. Agress shall report to the Chief
Executive Officer of Innodata Isogen with respect to the Transition Services.

 
c)
During the Transition Period, Innodata Isogen shall pay to Agress $8,471 per
month, in bi-monthly payroll installments of $4,235.50, less lawful deductions,
in consideration of the Transition Services provided by Agress during such
period. During the Extended Transition Period, if any, Innodata Isogen shall pay
to Agress $4,235.50 per month, in bi-monthly payroll installments of $2117.75,
less lawful deductions, in consideration of the Transition Services provided by
Agress during such period.

 
d)
Except to the extent modified by the Stock Option Modification Letter attached
hereto as Exhibit A, all stock options granted to Agress during his employment
with Innodata Isogen shall continue in full force and effect, in accordance with
their terms, during the Transition Period and Extended Transition Period, if
any.

3)
Payments upon Resignation.

 
a)
Effective as of the Transition Date Innodata Isogen shall pay to Agress a cash
severance of $101,652 (the “Cash Severance”) payable as follows:

 
i)
$25,413 payable during the Transition Period in six bi-monthly payroll
installments of $4,235.50, less lawful deductions, and

 
ii)
$76,239 payable as follows:

 

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(1)
If there is an Extended Transition Period:

 
(a)
$38,119.50 payable January 1, 2007 through March 31, 2007 in 6 bi-monthly
payroll installments of $6,353.25, less lawful deductions; and

 
(b)
$33,884 payable April 1, 2007 through May 30, 2007 in 4 bi-monthly payroll
installments of $8,471, less lawful deductions; and

 
(c)
$4,235.50, less lawful deductions, payable on June 15, 2007.

Or

 
(2)
If there is no Extended Transition Period:

 
(a)
$76,239 payable January 1, 2007 through May 15, 2007 in 9 bi-monthly payroll
installments of $8,471, less lawful deductions.

 
b)
Agress shall also receive payment for all accrued, unused vacation effective as
of the Transition Date, in accordance with Innodata Isogen policy.

 
c)
Payment of the Cash Severance is in no way contingent upon Agress’ performance
of the Transition Services.

4)
General Release. In order to receive the Cash Severance, Agress agrees to sign
the Agreement and General Release attached hereto as Exhibit B.

5)
Miscellaneous.

 
a)
Effective as of the Transition Date and subsequent to the conclusion of the
Transition Period and Extended Transition period, if any, Agress shall be
entitled to the same rights of indemnity for actions taken while an officer of
Innodata Isogen as Agress had as an officer. In the event that the rights of
indemnity of officers of Innodata Isogen are enhanced hereafter, Agress shall
also be entitled to such enhanced rights of indemnity as they relate to actions
taken while Agress was an officer or employee of Innodata Isogen. The foregoing
rights shall not be exclusive of any other rights to which Agress may be
entitled under any agreement, vote, statute, by-law or otherwise. It is
acknowledged and agreed that Agress’ right to indemnification by the Company is
in no way waived or altered by virtue of Agress’ signing of the Agreement and
General Release.

 
b)
All notices and other communications under this Agreement shall be in writing
and shall be deemed to have been delivered (i) on the date personally delivered,
or (ii) one day after properly sent by Federal Express, DHL or other reasonable
overnight courier service, addressed to the respective parties at the following
addresses:

To the Company:

Innodata Isogen, Inc.
Three University Plaza
Suite 506
Hackensack, New Jersey 07601
Attention: Jack Abuhoff, Chairman and CEO

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To Mr. Agress:

   
At the last known address provided by Agress to Innodata Isogen’s Human
Resources Department

 
c)
If any provision contained in this Agreement shall be determined to be void,
illegal or unenforceable, in whole or in part, then the other provisions
contained herein shall remain in full force and effect as if the provision which
was determined to be void, illegal, or unenforceable had not been contained
herein.

 
d)
This Agreement together with the Stock Option Modification Letter constitutes
the entire agreement between Innodata Isogen and Agress relating to the subject
matter herein, and supersedes any and all other agreements, oral or written, and
all other negotiations and communications between Innodata Isogen and Agress
relating to the subject matter described in this Agreement. In the event of any
inconsistency between the terms of this Agreement and the Stock Option
Modification letter, the terms of the Stock Option Modification letter will
govern and control.

 
e)
This Agreement shall be governed by and construed in accordance with the laws of
the State of New Jersey, without regard to its conflicts of law principles.

 
f)
This Agreement may not be modified, altered or amended except by written
agreement between Innodata Isogen and Agress.

Innodata Isogen, Inc.    Stephen Agress           By: /s/ Jack Abuhoff   By:
 /s/ Stephen Agress  
Jack Abuhoff
Chairman and CEO
   

    

    
 

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Exhibit A

Stock Option Modification Letter

See Attached
 

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Exhibit B

Agreement and General Release

In consideration for my signing of this Agreement and General Release (the
“General Release”) and agreement to abide by its terms, Innodata Isogen, Inc.
(“Innodata Isogen”) agrees to provide me with:

   (a) The Cash Severance set forth in Section 3(a) of the Transition Agreement
between Innodata Isogen and Agress dated September 30, 2006, less lawful
deductions, payable as set forth the in the Transition Agreement.

    I understand and agree that I would not receive such consideration except
for my execution of the General Release and my fulfillment of the promises
contained in this document that apply to me.

I acknowledge this General Release is invalid if signed before the Transition
Date set forth in the Transition Agreement which is September 30, 2006.

I knowingly and voluntarily release and forever discharge Innodata Isogen, its
affiliates, subsidiaries, divisions, successors and assigns, and their current
and former partners, affiliates, owners, agents, officers, directors, employees,
successors and assigns, individually and in their corporate capacities and
Innodata Isogen’s insurers, employee benefit plans, programs and arrangements
and their administrators, functionaries and fiduciaries (“Releasees”), of and
from any and all claims, known or unknown, asserted and unasserted, that I, my
heirs, executors, administrators, successors and assigns, have or may have
against Releasees as of the date of my execution of this General Release, other
than my rights of indemnity for actions taken while an officer of Innodata
Isogen, arising out of or related to my employment with Innodata Isogen or my
resignation as an Executive Officer (which includes my positions as Vice
President, Finance and Chief Accounting Officer), and full time employee of
Innodata Isogen, including, but not limited to, any alleged violation of: Title
VII of the Civil Rights Act of 1964; The Civil Rights Act of 1991; Sections 1981
through 1988 of Title 42 of the United States Code; The Employee Retirement
Income Security Act of 1974 (“ERISA”) (except for any vested benefits under any
tax qualified benefit plan); The Immigration Reform and Control Act; The
Americans with Disabilities Act of 1990; The Age Discrimination in Employment
Act of 1967 (“ADEA”); The Workers Adjustment and Retraining Notification Act;
The Occupational Safety and Health Act; The Fair Credit Reporting Act;
Sarbanes-Oxley Act of 2002; New Jersey Law Against Discrimination; New Jersey
Statutory Provision Regarding Retaliation/Discrimination for Filing a Workers’
Compensation Claim; New Jersey Family Leave Act; New Jersey Smokers Rights Law;
New Jersey Equal Pay Act;   New Jersey Genetic Privacy Act; New Jersey
Conscientious Employee Protection Act (Whistleblower Protection); The New Jersey
Wage Payment and Work Hour Laws; The New Jersey Public Employees’ Occupational
Safety and Health Act; New Jersey Fair Credit Reporting Act; New Jersey laws
regarding Political Activities of Employees, Lie Detector Tests, Jury Duty,
Employment Protection, and Discrimination; any claim for costs, fees, or other
expenses including attorneys’ fees incurred in these matters; any other federal,
state, local or other civil or human rights law; or any other local, state or
federal law, regulation or ordinance, and/or public policy, contract, tort or
common law. Moreover, although I retain the right to file a charge of
discrimination, I will not be entitled to receive any relief, recovery or monies
in connection with any complaint, charge or legal proceeding brought against
Releasees, including attorneys’ fees, without regard to the party or parties who
have instituted any such complaint, charge or legal proceeding, to the extent
permitted by law.

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I agree to return all confidential information to Innodata Isogen at the
conclusion of the Transition Period or Extended Transition Period, if any.
Innodata Isogen will have no obligation to provide any consideration hereunder
unless I return all confidential information to Innodata Isogen as set forth
herein. 

I agree not to defame, disparage, or demean Innodata Isogen, its affiliates,
subsidiaries and their respective current and former officers and directors, in
any manner whatsoever, provided that nothing contained herein shall prevent me
from providing truthful information about Innodata Isogen in connection with any
legal proceeding or to the extent compelled to do so by law.

I have not filed or caused to be filed, and I am not a party to, any claim,
charge, complaint, action or other legal proceeding against Releasees in any
forum or form as of the date of execution of this General Release. I have been
paid and/or have received all compensation, wages, bonuses, commissions and/or
benefits to which I may be entitled for all reported hours worked, and
acknowledge that no other compensation, wages, bonuses, commissions and/or
benefits are due to me except as provided in this General Release and in the
Transition Agreement.  I affirm that I have no known workplace injuries or
occupational diseases, and that I have been provided and/or have not been denied
any leave under any federal, state or local family/medical or disability leave
law.

I agree not to disclose any information regarding the existence or substance of
this General Release to any third party other than my immediate family and/or
tax or legal advisors, or as required by law. I further acknowledge that neither
this General Release nor the furnishing of the consideration for this General
Release is an admission by Innodata Isogen of any liability or unlawful conduct
of any kind.

I understand that: (i) this General Release shall be governed and conformed in
accordance with the laws of the state in which I last worked without regard to
the state’s conflict of laws provisions; (ii) should any provision of this
General Release be declared illegal or unenforceable by any court of competent
jurisdiction and cannot be modified to be enforceable, excluding the general
release language, such provision shall immediately become null and void, leaving
the remainder of this General Release in full force and effect; and (iii) this
General Release may not be modified, altered or changed except upon express
written consent of both parties in which specific reference is made to this
General Release. I further understand that after I enter into this Separation
Agreement, both Innodata Isogen and I will have the right to enforce its terms.

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I understand that I have up to twenty-one (21) days to consider this General
Release and I have been advised of my right to consult with an attorney prior to
executing this General Release. I further agree that any modifications, material
or otherwise, made to this General Release, do not restart or affect in any
manner my original twenty-one (21) day consideration period.

I further understand that I may revoke this General Release for a period of
seven (7) days following the day I execute it. Any revocation within this period
must be submitted, in writing, to Virginia Galdieri, Director of Human Resources
at Innodata Isogen, Three University Plaza, Hackensack, New Jersey 07601, and
must state, "I hereby revoke my acceptance of the General Release." The
revocation must be personally delivered to Virginia Galdieri, or to her
designee, or be mailed to Innodata Isogen, Inc., Three University Plaza,
Hackensack, New Jersey 07601, and postmarked within seven (7) days of my
execution of this General Release. This General Release shall not become
effective or enforceable until the revocation period has expired. If the last
day of the revocation period is a Saturday, Sunday or legal holiday recognized
in the state in which I last worked, then the revocation period shall not expire
until the next following day which is not a Saturday, Sunday or legal holiday.

This General Release reflects the entire agreement between the parties and
supersedes all prior agreements and understandings regarding the same subject
matter except for the Transition Agreement and the Agreement Concerning
Confidentiality and Non-Disclosure I previously executed. By signing this
General Release I re-affirm my continuing obligations under the Agreement
Concerning Confidentiality and Non-Disclosure, including, without limitation, my
obligations of non-solicitation of Innodata Isogen customers and employees, and
my obligations of confidentiality and non-disclosure. Having elected to execute
this General Release, to fulfill the promises set forth in these documents that
apply to me and to receive the consideration set forth herein, I freely and
knowingly, and after due consideration, enter into this General Release
intending to waive, settle and release all claims I have or might have against
Releasees. I acknowledge that I have not relied on any representations, promises
or agreements of any kind made to me in connection with my decision to execute
this General Release, except for those set forth in this General Release and in
the Transition Agreement.
 
Signed:     /s/ Stephen Agress

Print Name:   Stephen Agress
 
Date:    September 29, 2006
 

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