Exhibit 10.3


 


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 RICHARD HODGE (“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 


 

















 


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 1934.


 


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(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 


 


3

















 


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 


 


4

















 


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.


 


5

















 


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 


 


8

















 


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 


 


9

















 


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.


 


10

















 


	
  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 


 


11

















 


(a) 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.


 


12

















 


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]


 


13

















 


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/
  Richard Hodge

  
	
   

  	
  Richard
  Hodge

  
	
   

  	
  Executive

  



 


14

















 


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 


 


1

















 


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

















 


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

















 


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

  
					



 


4