Document:

Exhibit 10.5

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is
effective the 11th day of December, 2007 (the
“Effective Date”), by and between MEDecision, Inc., a Pennsylvania
corporation (the “Company”) and SCOTT PADDOCK (the “Executive”).

 

WHEREAS, the Company desires to continue Executive’s
employment and Executive desires to continue to be so employed by the Company
on the terms described herein.

 

NOW, THEREFORE, in consideration of the foregoing and
the mutual covenants and promises contained herein, and intending to be bound
hereby, the parties agree as follows:

 

1.             Duration
of Agreement.  This Agreement has no
specific expiration date.  Unless
terminated by agreement of the parties, this Agreement will govern Executive’s
continued employment by the Company until that employment ceases.

 

2.             Title;
Duties.  Executive will continue to
be employed as the Company’s Executive Vice
President, Client Solutions, reporting directly to the Company’s
Chief Executive Officer.  Executive will
devote his best efforts and substantially all of his business time and services
to the Company and its affiliates to perform such duties as may be customarily
incident to his position and as may reasonably be assigned to him from time to
time.  Executive will not, in any
capacity, engage in other business activities or perform services for any other
individual, firm or corporation without the prior written consent of the
Company; provided, however, that
without such consent, Executive may engage in charitable, public service and
personal investment activities, so long as such activities do not in any
respect interfere with Executive’s performance of his duties and obligations
hereunder.

 

3.             Place
of Performance.  Executive will
perform his services hereunder at the principal executive offices of the
Company; provided, however, that
Executive may be required to travel from time to time for business purposes.

 

4.             Compensation
and Benefits.

 

4.1.          Base
Salary, Executive’s annual salary will be $225,000 (the “Base Salary”),
paid in accordance with the Company’s payroll practices, as in effect from time
to time.  The Base Salary will be
reviewed on an annual basis by the Company’s Board of Directors (the “Board”)
or the Compensation Committee of the Board and may be increased from time to
time.  To the extent the Board has
authorized its Compensation Committee to act on its behalf in any particular
respect, references to the Board in that context will also be deemed to include
the Compensation Committee.

 

4.2.          Incentive
Compensation.

 

4.2.1.       Cash Bonuses.  Executive will be eligible for cash bonuses
as follows:

 

 

(a)           For
the fiscal year ending December 31, 2007, Executive will be considered for
an annual bonus at the sole discretion of the Board, based on such factors as
the Board may then deem relevant.

 

(b)           For
each of the 2008, 2009, 2010 and 2011 fiscal years, Executive will be eligible
for an annual cash bonus based on the actual revenue recognized by the Company
in the applicable year (the “Annual Revenue”), as follows:

 

(i)            If
Annual Revenue exceeds the Base Year Revenue (as defined below), but is equal
to or less than the level of annual revenue forecast in public guidance
announced by the Company at (or immediately preceding) the start of the
applicable calendar year (not taking into account any subsequent revision of
that guidance, except as otherwise determined by the Board in accordance with Section 4.2.3(c) below)(the
“Public Target”), Executive will receive an annual cash bonus equal to (A) $80,000,
multiplied by (B)(1) the amount by which Annual Revenue exceeds the Base
Year Revenue, divided by (2) the difference between the Public Target and
the Base Year Revenue.

 

(ii)           If
Annual Revenue exceeds the Public Target, but is less than the annual revenue
target contained in the internal operating plan approved by the Board at (or
immediately preceding) the start of the applicable calendar year (not taking
into account any subsequent revision of that annual operating plan, except as
otherwise determined by the Board in accordance with Section 4.2.3(c),
below) (the “Internal Target”), Executive will receive an annual cash
bonus equal to $80,000, plus (A) $100,000, multiplied by (B)(1) the
amount by which Annual Revenue exceeds the Public Target, divided by (2) the
difference between the Internal Target and the Public Target.

 

(iii)          If Annual Revenue exceeds the Internal
Target, Executive will receive an annual cash bonus equal to $180,000 plus one
percent (1%) of the amount by which Annual Revenue exceeds the Internal Target.

 

(c)           For
each of the 2008, 2009, 2010 and 2011 fiscal years, Executive will be eligible
for additional cash bonuses, as follows:

 

(i)            For
each year that the Annual Revenue exceeds the Public Target, Executive will be
eligible for an additional cash bonus of up to $50,000 based upon the
achievement of revenue balance goals established in the discretion of the Board
(or its designee) at the start of the applicable year.

 

(ii)           For
each year that the Annual Revenue exceeds the Public Target, Executive will be
eligible for an additional cash bonus of up to $50,000 based upon the
achievement of sales management goals established in the discretion of the
Board (or its designee) at the start of the applicable year.

 

4.2.2.       Stock Option Awards.  Executive will be eligible for the following
equity awards:

 

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(a)           For
each of the 2008, 2009, 2010 and 2011 fiscal years, Executive will be eligible
for additional stock option grants, based on the Annual Revenues for the
applicable year, as follows:

 

(i)            If
Annual Revenue exceeds the Base Year Revenue, Executive will be granted an
additional stock option with respect to the following number of Shares:  (A) 15,000, multiplied by (B) a
fraction (not to exceed one) the numerator of which will be the amount by which
Annual Revenue exceeds the Base Year Revenue, and the denominator of which will
be the difference between the Public Target and the Base Year Revenue.  Each such option will become exercisable over
the four year period following the date of grant (in four equal annual
installments), subject in each case to Executive’s continued employment by the
Company through the applicable vesting date.

 

(ii)           If
Annual Revenue exceeds the Public Target, Executive will be granted an
additional stockoption with respect to the following number of Shares: (A) 15,000,
multiplied by (B) a fraction (not to exceed one) the numerator of which is
the amount by which Annual Revenue exceeds the Public Target, and the
denominator of which is the difference between the Internal Target and the
Public Target.  Each such option will be
immediately exercisable with respect to half the Shares subject thereto, and
will become exercisable with respect to the remaining Shares subject thereto on
the first anniversary of the date of grant, subject to Executive’s continued
employment by the Company through that date.

 

(iii)          For each 1% by which Annual Revenue exceeds
the Internal Target, Executive will be granted an additional stock option with
respect to 3,000 Shares.  For example, if
Annual Revenue exceeds the Internal Target by 2.5%, Executive will receive
additional stock options with respect to 7,500 Shares (3,000 * 2.5).  Each such option will be immediately
exercisable with respect to half the Shares subject thereto, and will become
exercisable with respect to the remaining Shares subject thereto on the first
anniversary of the date of grant, subject to Executive’s continued employment
by the Company through that date.  The
largest grant issuable under this Section 4.2.2(b)(iii) with
respect to any single fiscal year will be limited to 30,000 Shares.

 

(b)           Each
option issuable hereunder will have an exercise price equal to the fair market
value per Share on the date of grant and will be subject to such other terms as
the Board may prescribe, in its discretion.

 

4.2.3.       Additional Terms.

 

(a)           For
purposes of this Section 4.2, “Base Year Revenue” means, as
of any specified date, the highest Annual Revenues achieved by the Company in
any fiscal year completed on or after December 31, 2007 and prior to such
specified date.

 

(b)           The
payment of any bonus or the issuance of any option pursuant to this Section 4.2
with respect to any fiscal year of the Company is subject to the condition that
Executive remain continuously employed by the Company through the date of the
filing of the Company’s Form 10-K for that year.  Once that Form 10-K is filed, any bonus
then 

 

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payable or option
then issuable hereunder will be paid or issued, as applicable, within 30 days
of the filing.

 

(c)           For
purposes of this Section 4.2, the measurement of corporate and/or
individual performance will be performed by the Board (or its designee) in good
faith, in accordance with generally accepted accounting principles and with
reference to the Company’s audited financial statements.  The Board, in its sole discretion, may make
adjustments to the goals or thresholds relevant hereunder, so that required
departures from the Company’s operating budget, changes in accounting
principles, acquisitions, dispositions, mergers, consolidations and other
corporate transactions, and other factors influencing the achievement or
calculation of such goals do not affect the operation of Section 4.2
in a manner inconsistent with the achievement of its intended purposes.

 

4.3.          Employee
Benefits.  Executive will be eligible
to participate in retirement/savings, health insurance, life insurance,
disability insurance and other employee benefit plans, policies or arrangements
maintained by the Company for its employees generally, subject to the terms and
conditions of such plans, policies or arrangements; provided, however, that this Agreement will not limit the
Company’s ability to amend, modify or terminate such plans, policies or
arrangements at any time for any reason.

 

4.4.          Paid
Time Off.  Executive will be entitled
to paid time off each year in accordance with the published policies of the
Company.

 

4.5.          Reimbursement
of Expenses.  Executive will be
reimbursed by the Company for all reasonable business expenses incurred by him
in accordance with the Company’s customary expense reimbursement policies as in
effect from time to time.

 

4.6.          Indemnification.  Executive will be indemnified for acts
performed as an employee of the Company to the extent provided in the Company’s
Bylaws, as in effect from time to time.

 

5.             Termination.  Upon any cessation of his employment with the
Company, Executive will be entitled
only to such compensation and benefits as described in this Section 5.

 

5.1.          Termination
without Cause or for Good Reason.  If
Executive’s employment by the Company ceases due to a termination by the
Company without Cause (as defined below) or a resignation by Executive for Good
Reason (as defined below), Executive will be entitled to:

 

5.1.1.       payment of all accrued and unpaid Base Salary
through the date of such cessation;

 

5.1.2.       payment of any annual bonus otherwise payable
(but for the cessation of Executive’s employment) with respect to a year ended
prior to the cessation of Executive’s employment;

 

5.1.3.       monthly severance payments equal to one-twelfth
of Executive’s Base Salary for a period equal to 6 months; and

 

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5.1.4.       waiver of the applicable premium otherwise
payable for COBRA continuation coverage for Executive (and, to the extent
covered immediately prior to the date of such cessation, his eligible
dependents) for a period equal to 6 months.

 

Except
as otherwise provided in this Section 5.1, all compensation and
benefits will cease at the time of such cessation, subject to the terms of any
benefits or compensation plans then in force and applicable to Executive, and
the Company will have no further liability or obligation by reason of such
cessation.  The payments and benefits
described in this Section 5.1 are in lieu of, and not in addition
to, any other severance arrangement maintained by the Company.  Notwithstanding any provision of this
Agreement, the payments and benefits described in Section 5.1 are
conditioned on Executive’s resignation from all employee and director positions
with the Company and its affiliates and on Executive’s execution and delivery
to the Company, within 60 days following his cessation of employment, of a
release in such form as the Company may require in a manner consistent with the
requirements of the Older Workers Benefit Protection Act (the “Release”).  Subject to Section 5.4, below,
the severance benefits described in this Section 5.1 will begin to
be paid or provided as soon as the Release becomes irrevocable.

 

5.2.          Termination
Following a Change in Control.  If,
within one year following a Change in Control (as defined below), Executive’s
employment by the Company ceases due to a termination by the Company without Cause
or a resignation by Executive for Good Reason, then:

 

5.2.1.       subject to the Release becoming irrevocable, the
duration of the severance benefits described in Sections 5.1.3 and 5.1.4
will be extended from 6 months to 12 months;

 

5.2.2.       subject to the Release becoming irrevocable,
Executive will be credited with an additional 12 months of service for purposes
of determining the vested status of any stock options or other equity-based
incentives held by him immediately prior to such cessation; and

 

5.2.3.       the post-cessation duration of the restrictions
contained in Sections 8.1.1 and 8.1.2 will be extended from one year to
two years.

 

5.3.          Other
Terminations.  If Executive’s
employment with the Company ceases for any reason other than as described in Section 5.1,
above (including but not limited to termination (a) by the Company for
Cause, (b) as a result of Executive’s death, (c) as a result of
Executive’s Disability (as defined below), or (d) by Executive without
Good Reason), then the Company’s obligation to Executive will be limited solely
to the payment of accrued and unpaid Base Salary through the date of such
cessation.  All compensation and benefits
will cease at the time of such cessation and, except as otherwise provided by
COBRA, the Company will have no further liability or obligation by reason of
such termination.  The foregoing will not
be construed to limit Executive’s right to payment or reimbursement for claims
incurred prior to the date of such termination under any insurance contract
funding an employee benefit plan, policy or arrangement of the Company in
accordance with the terms of such insurance contract.

 

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5.4.          Compliance
with Section 409A. 
Notwithstanding any other provision of this Agreement, if the
termination giving rise to any payment or benefit described in Section 5
is not a “Separation from Service” within the meaning of Treas. Reg. § 1.409A-1(h)(1) (or
any successor provision), then the payment of those amounts (to the extent they
constitute a “deferral of compensation,” within the meaning of Section 409
A of the Internal Revenue Code) will be deferred (without interest) until such
time as Executive experiences a Separation from Service.  In addition, to the extent compliance with
the requirements of Treas.  Reg. § 1.409A-3(i)(2) (or
any successor provision) is necessary to avoid the application of an additional
tax under Section 409A of the Internal Revenue Code, those amounts that
would otherwise be paid within six months following Executive’s Separation from
Service (taking into account the preceding sentence) will instead be deferred
(without interest) and paid to Executive in a lump sum immediately following
that six-month period.  This provision
shall not be construed as preventing the application of Treas.  Reg. §§ 1.409A-l(b)(4) or
1.409A-l(b)(9) (or any successor provisions) to amounts payable hereunder.

 

5.5.          Compliance
with Section 280G.  If any
payment or benefit due to Executive from the Company or its subsidiaries or affiliates,
whether under this Agreement or otherwise, would (if paid or provided)
constitute an Excess Parachute Payment (as defined below), then notwithstanding
any other provision of this Agreement or any other commitment of the Company,
that payment or benefit will be limited to the minimum extent necessary to
ensure that no portion thereof will fail to be tax-deductible to the Company by
reason of Section 280G of Code.  The
determination of whether any payment or benefit would (if paid or provided)
constitute an Excess Parachute Payment will be made by the Company, in good
faith and in its sole discretion.  If
multiple payments or benefits are subject to reduction under this paragraph,
the order in which such payments or benefits are reduced will be determined by
the Company, in its discretion; provided that, in exercising its discretion in
this regard, the Company will exercise reasonable efforts to reduce the
payments or benefits in the order that maximizes Executive’s economic
position.  If, notwithstanding the
initial application of this Section 5.5, the Internal Revenue
Service determines that any payment or benefit provided to Executive
constituted an Excess Parachute Payment, this Section 5.5 will be
reapplied based on the Internal Revenue Service’s determination and Executive
will be required to promptly repay to the Company any amount in excess of the
payment limit of this Section 5.5.

 

5.6.          Definitions.  For purposes of this Agreement:

 

5.6.1.       “Cause” means the occurrence of any of the
following:  (a) Executive’s refusal,
failure or inability to perform his duties or to follow the lawful directives
of his supervisor(s); which refusal, failure or inability continues for more
than 15 days after written notice thereof; (b) misconduct, recklessness or
gross negligence by Executive in the course of employment that is demonstrably
injurious to the Company or its affiliates; (c) Executive’s conviction of,
or the entry of a plea of guilty or no contest to, a felony or a crime that
could reasonably be expected to have an adverse effect on the operations,
condition or reputation of the Company or its affiliates; (d) material
breach by Executive of any agreement with, lawful policy of or fiduciary duty
owed to the Company or its affiliates; (e) gross insubordination by
Executive in the course of employment; or (f) alcohol abuse or use of
controlled drugs other than in accordance with a physician’s prescription.

 

6

 

5.6.2.       “Change in Control” means the occurrence of any
of the following, in one transaction or a series of related transactions:

 

(a)           any
“person” (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended) becoming a “beneficial owner” (as
defined in Rule 13d-3 under said Act), directly or indirectly, of
securities of the Company representing more than 50% of the voting power of the
Company’s then outstanding securities;

 

(b)           a
consolidation, share exchange, reorganization or merger of the Company
resulting in the stockholders of the Company immediately prior to such event
not owning at least a majority of the voting power of the resulting entity’s
securities outstanding immediately following such event;

 

(c)           the
sale or other disposition of all or substantially all the assets of the
Company, other than in connection with a state or federal bankruptcy
proceeding; or

 

(d)           any
similar event deemed by the Board to constitute a Change in Control.

 

For
the avoidance of doubt, a transaction (or a series of related transactions)
will not constitute a Change in Control if such transaction results in the
Company, any successor to the Company, or any successor to the Company’s
business, being controlled, directly or indirectly, by the same person or
persons who controlled the Company, directly or indirectly, immediately before
such transaction.

 

5.6.3.       “Disability” means a condition entitling
Executive to benefits under any Company sponsored or funded disability plan,
policy or arrangement or under the Social Security Act.”

 

5.6.4.       “Excess Parachute Payment” has the same meaning
as used in Section 280G(b)(l) of the Code.

 

5.6.5.       “Good Reason” means any of the following,
without Executive’s prior consent:  (a) a
material, adverse change in Executive’s title, authority or duties (including
the assignment of duties materially inconsistent with Executive’s position); (b) relocation
of Executive’s principal worksite to a location outside the Philadelphia
metropolitan area; or (c) a material breach by the Company of this
Agreement.  However, none of the
foregoing events or conditions will constitute Good Reason unless:  (x) Executive provides the Company with
written objection to the event or condition within 30 days following the
occurrence thereof, (y) the Company does not reverse or otherwise cure the
event or condition within 30 days of receiving that written objection, and (z) Executive
resigns his employment within 30 days following the expiration of that cure
period.

 

6.             Proprietary
Matter.  Except as permitted or
directed by the Company, Executive will not during the term of his employment
or at any time thereafter divulge, furnish, disclose or make accessible (other
than in the ordinary course of the business of the Company) to anyone for use
in any way any confidential, secret, or proprietary knowledge or information of
the Company (“Proprietary Matter”) which Executive has acquired or become
acquainted with or will acquire 

 

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or become
acquainted with, whether developed by himself or by others, including, but not
limited to, any trade secrets, confidential or secret designs, processes,
formulae, software or computer programs, plans, devices or material (whether or
not patented or patentable, copyrighted or copyrightable) directly or
indirectly useful in any aspect of the business of the Company, any
confidential customer, distributor or supplier lists of the Company, any
confidential or secret development or research work of the Company, or any
other confidential, secret or non-public aspects of the business of the
Company.  Executive acknowledges that the
Proprietary Matter constitutes a unique and valuable asset of the Company
acquired at great time and expense by the Company, and that any disclosure or
other use of the Proprietary Matter other than for the sole benefit of the
Company would be wrongful and would cause irreparable harm to the Company.  Both during and after the term of this
Agreement, Executive will refrain from any acts or omissions that would reduce
the value of Proprietary Matter to the Company. 
The foregoing obligations of confidentiality, however, will not apply to
any knowledge or information which is now published or which subsequently
becomes generally publicly known, other than as a direct or indirect result of
the breach of this Agreement by Executive.

 

7.             Ventures.  If, during the term of this Agreement,
Executive is engaged in or associated with the planning or implementing of any
project, program or venture involving the Company and a third party or parties,
all rights in the project, program or venture will belong to the Company and
will constitute a corporate opportunity belonging exclusively to the
Company.  Except as expressly approved in
writing by the Company, Executive will not be entitled to any interest in such
project, program or venture or to any commission, finder’s fee or other
compensation in connection therewith, other than the compensation to be paid to
Executive as provided in this Agreement.

 

8.             Protective
Provisions.

 

8.1.1.       Competitive Activities.  During Executive’s employment and for one
year thereafter (or two years thereafter, in the event of a severance event
described in Section 5.2), Executive will not in the continental
United States of America, directly or indirectly, either as an employee,
employer, consultant, agent, principal, partner, stockholder, corporate
officer, director, or in any other individual or representative capacity,
engage or participate in any business engaged in the provision of integrated
medical management services, technology-based clinical decision support or
transaction management solutions to managed care or other payers (a “Competing
Business”).  Notwithstanding the
foregoing, Executive may hold up to 2% of the outstanding securities of any
class of any publicly-traded securities of any company.

 

8.1.2.       Solicitation of Customers and Employees.  During his employment by the Company and for
one year thereafter (or two years thereafter, in the event of a severance event
described in Section 5.2), Executive will not, either directly or
indirectly, on his own behalf or in the service or on behalf of others:

 

(a)           solicit,
divert or appropriate, or attempt to solicit, divert or appropriate, to any
Competing Business any customer or client of the Company, or any person or
entity whose account has been solicited by the Company;

 

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(b)           influence
or attempt to influence any person to terminate or modify any employment,
consulting, agency, distributorship or other arrangement with the Company; or

 

(c)           employ
or retain any person who has resigned or been terminated from employment or
engagement as an employee, consultant, agent or distributor of the Company
within the preceding 12 months.

 

8.2.          Acknowledgements.  Executive acknowledges that the provisions of
Section 8 (the “Restrictive Covenants”) are reasonable and
necessary to protect the legitimate interests of the Company and its
affiliates, that the duration and geographic scope of the Restrictive Covenants
are reasonable given the nature of this Agreement and the position Executive
holds within the Company, and that the Company would not enter into this
Agreement or otherwise continue to employ Executive unless Executive agrees to
be bound by the Restrictive Covenants set forth in this Section 8.

 

8.3.          Remedies
and Enforcement Upon Breach.

 

8.3.1.       Specific Enforcement.  Executive acknowledges that any breach by
him, willfully or otherwise, of the Restrictive Covenants will cause continuing
and irreparable injury to the Company for which monetary damages would not be
an adequate remedy.  Executive will not,
in any action or proceeding to enforce any of the provisions of this Agreement,
assert the claim or defense that such an adequate remedy at law exists.  In the event of any breach by Executive of
the Restrictive Covenants, the Company will be entitled to injunctive or other
similar equitable relief in any court, without any requirement that a bond or
other security be posted, and this Agreement will not in any way limit remedies
of law or in equity otherwise available to the Company.

 

8.3.2.       Judicial Modification.  If any court determines that any of the
Restrictive Covenants, or any part thereof, is unenforceable because of the
duration or geographical scope of such provision, such court will have the
power to modify such provision and, in its modified form, such provision will
then be enforceable.

 

8.3.3.       Accounting.  If Executive breaches any of the Restrictive
Covenants, the Company will have the right and remedy to require Executive to
account for and pay over to the Company all compensation, profits, monies,
accruals, increments or other benefits derived or received by Executive as the
result of such breach.  This right and
remedy will be in addition to, and not in lieu of, any other rights and
remedies available to the Company under law or in equity.

 

8.3.4.       Enforceability.  If any court holds the Restrictive Covenants unenforceable
by reason of their breadth or scope or otherwise, it is the intention of the
parties hereto that such determination not bar or in any way affect the right
of the Company to the relief provided above in the courts of any other
jurisdiction within the geographic scope of the Restrictive Covenants.

 

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8.3.5.       Disclosure of Restrictive Covenants.  Executive agrees to disclose the existence
and terms of the Restrictive Covenants to any employer that Executive may work
for during while the Restricted Covenants remain applicable.

 

8.3.6.       Extension of Restricted Period.  If Executive breaches Section 8.1, the restrictions
contained in that section will be extended for a period equal to the period
that Executive was in breach.

 

8.3.7.       Application Following Termination.  The Restrictive Covenants will continue to
apply following any cessation of Executive’s employment without regard to the
reason for that cessation and without regard to whether that cessation was
initiated by Executive or the Company.

 

9.             Miscellaneous.

 

9.1.          No
Liability of Officers and Directors for Severance Upon Insolvency.  Notwithstanding any other provision of the
Agreement and intending to be bound by this provision, Executive hereby (a) waives
any right to claim payment of amounts owed to him, now or in the future,
pursuant to this Agreement from directors or officers of the Company if the
Company becomes insolvent, and (b) fully and forever releases and
discharges the Company’s officers and directors from any and all claims,
demands, liens, actions, suits, causes of action or judgments arising out of
any present or future claim for such amounts.

 

9.2.          Other
Agreements.  Executive represents and
warrants to the Company that there are no restrictions, agreements or
understandings whatsoever to which he is a party that would prevent or make
unlawful his execution of this Agreement, that would be inconsistent or in
conflict with this Agreement or Executive’s obligations hereunder, or that
would otherwise prevent, limit or impair the performance by Executive of his
duties under this Agreement.

 

9.3.          Successors
and Assigns.  The Company may assign
this Agreement to any successor to all or substantially all of its assets and
business by means of liquidation, dissolution, merger, consolidation, transfer
of assets, sale of stock or otherwise. 
The duties of Executive hereunder are personal to Executive and may not
be assigned by him.

 

9.4.          Governing
Law and Enforcement.  This Agreement
will be governed by and construed in accordance with the laws of the
Commonwealth of Pennsylvania, without regard to the principles of conflicts of
laws.  Any legal proceeding arising out
of or relating to this Agreement will be instituted in a state or federal court
in the Commonwealth of Pennsylvania, and Executive and the Company hereby
consent to the personal and exclusive jurisdiction of such court(s) and
hereby waive any objection(s) that they may have to personal jurisdiction,
the laying of venue of any such proceeding and any claim or defense of
inconvenient forum.

 

9.5.          Waivers.  The waiver by either party of any right
hereunder or of any breach by the other party will not be deemed a waiver of
any other right hereunder or of any other breach by the other party.  No waiver will be deemed to have occurred
unless set forth in a writing.  No waiver
will constitute a continuing waiver unless specifically stated, and any waiver
will operate only as to the specific term or condition waived.

 

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9.6.          Severability.  Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law.  However, if any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability will not affect
any other provision, and this Agreement will be reformed, construed and
enforced as though the invalid, illegal or unenforceable provision had never
been herein contained.

 

9.7.          Survival.  This Agreement will survive the cessation of
Executive’s employment to the extent necessary to fulfill the purposes and
intent the Agreement.

 

9.8.          Notices.  Any notice or communication required or
permitted under this Agreement will be made in writing and (a) sent by
overnight courier, (b) mailed by overnight U.S. express mail, return
receipt requested or (c) sent by telecopier.  Any notice or communication to Executive will
be sent to the address contained in his personnel file.  Any notice or communication to the Company
will be sent to the Company’s principal executive officers, to the attention of
its Chief Executive Officer. 
Notwithstanding the foregoing, either party may change the address for
notices or communications hereunder by providing written notice to the other in
the manner specified in this paragraph.

 

9.9.          Entire
Agreement; Amendments.  This
Agreement contains the entire agreement and understanding of the parties hereto
relating to the subject matter hereof, and merges and supersedes all prior and
contemporaneous discussions, agreements and understandings of every nature
relating to the subject matter.  This
Agreement may not be changed or modified, except by an agreement in writing
signed by each of the parties hereto.

 

9.10.        Withholding.  All payments (or transfers of property) to
Executive will be subject to tax withholding to the extent required by
applicable law.

 

9.11.        Section Headings.  The headings of sections and paragraphs of
this Agreement are inserted for convenience only and will not in any way affect
the meaning or construction of any provision of this Agreement.

 

9.12.        Counterparts; Facsimile.  This Agreement may be executed in multiple counterparts
(including by facsimile signature), each of which will be deemed to be an
original, but all of which together will constitute but one and the same
instrument.

 

[Signature page follows]

 

11

 

IN WITNESS WHEREOF, the Company has caused this
Agreement to be executed by its duly authorized officer, and Executive has
executed this Agreement, in each case on December 11, 2007.

 

	
   

  	
  MEDecision, Inc.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Carl E. Smith

  
	
   

  	
  Name:
  Carl E. Smith

  
	
   

  	
  Title:
  CFO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Executive]

  
	
   

  	
   

  
	
   

  	
  /s/ Scott PaddockExhibit 10 (g)

 

MARKETING
SERVICES AGREEMENT

 

THIS
MARKETING SERVICES AGREEMENT is made as of December 19, 2007 between DNB
FIRST, NATIONAL ASSOCIATION, a national banking association with an address at
4 Brandywine Avenue, Downingtown, PA 19335 (“DNB”) and TSG, INC., a
Pennsylvania business corporation with an address at P.O. Box 156, 1212
Scott Road, Unionville, PA 19375 (“Service Provider”).

 

Background:

 

A. DNB does not presently have sufficient staff to
provide all of the “Marketing Services” referred to below for itself.

 

B. Eli Silberman, the principal of Service Provider,
is uniquely situated to assist DNB with the Marketing Services because of his
marketing industry knowledge and experience, and his knowledge of DNB.

 

In consideration of the premises and mutual
obligations contained herein, and intending to be legally bound, the parties
hereto agree as follows:

 

1. Marketing Services.  Service Provider shall provide consulting
services and assist DNB in the execution of its branding strategy for the purpose
of successfully differentiating DNB’s products and services.  To achieve that goal, Service Provider shall consult
with and assist DNB in the development of the 2007 Annual Report.  Service provider shall also provide
occasional consulting services on creative and or advertising concepts or
programs.

 

The foregoing services shall produce the deliverables,
and be consistent with, the documented discussions DNB and Service Provider
have had to date, and shall be subject to such performance measures for each
stage of performance as the parties shall identify prior to commencement of
each stage of services.  The foregoing
are sometimes referred to in this Agreement as the “Marketing Services.”  The Marketing Services shall be provided
within such deadlines as the parties may mutually agree from time to time, but
shall in all events be consistent with DNB’s marketing requirements.

 

2. Compensation.  In consideration for Service Provider
rendering the Marketing Services, DNB shall (i) reimburse Service Provider
its reasonable out-of-pocket expenses in providing the Marketing Services. All
such expenses are subject to prior approval by DNB’s Retail Banking Division’s
Executive Vice President; and (ii) pay Service Provider a monthly retainer of $2,500.00
per month for each calendar month in 2008 for each month that this Agreement remains
in effect.

 

3.
Regulatory Compliance.  This
Agreement shall in all events be subject to all applicable banking laws and
regulations.  The performance of
Marketing Services by the Service Provider is subject to examination oversight
by DNB’s applicable banking regulators. 
Without limiting the foregoing, the provision of Marketing Services and
the payment of compensation therefor shall be on terms and at compensation
rates that are substantially the same, or at least as favorable to DNB, as
those available to DNB for comparable services from other nonaffiliated service
providers.  The parties agree to modify
this 

 

 

Agreement
and the compensation payable hereunder from time to time to conform to any
applicable regulatory requirements. 
Service Provider shall each be subject to examination by DNB’s
regulators to the extent deemed appropriate or necessary by such regulators in
connection with this Agreement.

 

4.
Intellectual Property.  Any work
product and intellectual property, such as DNB’s name, logo, trademark, and
copyrighted material, shall be the sole property of DNB.

 

5.
Confidentiality; Preservation and Disposition of Confidential Information.  All information relating to DNB, including
without limitation relating to its products, services, methods, branding and
other business strategies, product designs, and customers and consumers, and
all information relating to any DNB customers or consumers, shall be
confidential (collectively “Confidential Information”) and shall not be
disclosed by Service Provider to any third party without DNB’s prior written
consent.  Service Provider shall,
consistent with DNB’s policies and procedures and laws and regulations
applicable to DNB:  (a) establish
policies, safeguards, methods and procedures to ensure the confidentiality of
Confidential Information; (b) establish policies, safeguards, methods and
procedures for disposing of Confidential Information; (c) establish
policies, safeguards, methods, and procedures consistent with DNB policies and
procedures and the laws and regulations applicable to DNB to assure, to DNB’ s
reasonable satisfaction, that no third party will gain unauthorized access to
any Confidential Information; and (d) upon completion of the engagement
for Marketing Services, take such steps as DNB may request to turn over to DNB
or destroy all Confidential Information.

 

6.
Business Resumption and Contingency Plans.  Service Provider shall be responsible for
backing up and otherwise protecting all program and data files of Service
Provider relating to DNB and the Marketing Services, for protecting any
equipment used in providing the Marketing Services, and for maintaining
disaster recovery and contingency plans reasonably acceptable to DNB, including
plans and procedures for testing of those plans and providing results to DNB
when requested.

 

7.
Termination. This Agreement will expire on December 31, 2008;
however, either party may terminate this Agreement prior to such date by
written notice of termination upon sixty (60) days written notice. Upon such
termination, the parties’ relative rights and obligations shall be governed by
this Agreement and applicable law, but notwithstanding any termination, the
provisions of Sections 3, 4 and 5 of this Agreement shall survive and continue
to bind both parties.

 

8. Authorization.  Service Provider and DNB each respectively
represents and warrants, one to the other, that this Agreement has been duly
authorized by their respective boards of directors and that a copy of this
Agreement, fully executed, shall be continuously maintained hereafter as a part
of its corporate records.

 

9. Assignment. 
This Agreement and all of the provisions hereof shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns.  Neither this
Agreement nor any of the rights, interests or obligations hereunder may be
assigned by any of the parties hereto without the prior written consent of the
other parties.

 

2

 

10.  Entire
Agreement.  This agreement embodies
the entire agreement and understanding of the parties with respect to the
transactions contemplated hereby and supersedes all prior written or oral commitments,
arrangements or understandings with respect thereto. There are no restrictions,
agreements, promises, warranties, covenants or undertakings with respect to the
transactions contemplated hereby other than those expressly set forth herein or
therein.

 

11.  Counterparts.  This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
each of which shall be deemed an original.

 

12.  Governing
Law.  This Agreement shall be
governed by the internal laws of the Commonwealth of Pennsylvania (regardless
of the laws that might be applicable under principles of conflicts of law) as
to all matters, including but not limited to matters of validity, construction,
effect and performance, except to the extent such laws are pre-empted by
applicable federal laws or regulations.

 

13.  Severability.  If any one or more of the provisions of this
Agreement shall be held to be invalid, illegal or unenforceable, the validity,
legality or enforceability of the remaining provisions of this Agreement shall
not be affected thereby. To the extent permitted by applicable law, each party
waives any provision of law, which renders any provision of this Agreement
invalid, illegal or unenforceable in any respect.

 

14. Amendments. 
This Agreement may not be changed, modified or amended except by written
agreement signed by all parties hereto.

 

IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed as of the day and year first above written.

 

	
  DNB
  FIRST, NATIONAL ASSOCIATION 

  	
  TSG,
  INC. 

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Richard J. Hartmann

  	
   

  	
  By:
  

  	
  /s/
  Eli Silberman

  
	
   

  	
  Richard J. Hartmann,

  	
   

  	
   

  	
  President

  
	
   

  	
  Executive Vice President

  	
   

  	
   

  	
   

  

 

3

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