TERMINATION OF CONSULTING AGREEMENT
This Termination of Consulting Agreement (the "Agreement") dated as of October
30, 1997, among Network Imaging Corporation, a Delaware corporation (the
"Company"), BCG, Inc., ("BCG"), and Xxxxxx X. Xxxxxxxx, an adult individual
resident of the State of Virginia, ("Xx. Xxxxxxxx").
WHEREAS, the Company, BCG and Xx. Xxxxxxxx entered into that certain Consulting
Agreement dated May 28, 1996 (the "Consulting Agreement");
WHEREAS, each of the Company, BCG and Xx. Xxxxxxxx desire to terminate the
Consulting Agreement, effective as of October 1, 1997 (the "Termination Date");
NOW, THEREFORE, in consideration of the promises and of the mutual covenants and
agreements hereinafter set forth, the parties hereby agree as follows:
Section 1. Termination Date.
BCG's termination will be effective as of the Termination Date.
Section 2. Severance Pay.
The Company agrees to pay BCG gross severance pay at the rate of $18,750 per
month, beginning on October 1, 1997, through and including September 1, 1998.
Checks will be issued and mailed on the first of each month. In the event that
the first of the month falls on a weekend or legal holiday, the check will be
issued and mailed on the next proceeding business day. Additionally, the Company
agrees to grant to Xx. Xxxxxxxx a warrant to purchase 50,000 shares of Network
Imaging Common Stock (the "Network Imaging Common Stock") for $1.50 per share
(the "Warrants"). The Warrants shall be for a term of five (5) years.
Section 3. Repricing Stock Options.
The Company agrees to reprice Xx. Xxxxxxxx'x existing stock options. Xx.
Xxxxxxxx currently holds 1,348,325 options to purchase Network Imaging Common
Stock, at an exercise price ranging from $2.60 to $6.82 (the "Pre-Existing
Options"). The Pre-Existing Options shall be converted, using the Black-Scholes
model, into 755,747 options to purchase shares of Network Imaging Common Stock
at an exercise price of $1.50 per share, the market price of the Network Imaging
Common Stock on September 17, 1997 (the "Post-Effective Options"). The
Post-Effective Options shall be subject to he vesting schedule for those
options. Notwithstanding the current exercisability of the Post-Effective
Options, the Post-Effective Options shall not be exercisable for a period of
twelve (12) months from the Termination Date of this Agreement. Xx. Xxxxxxxx
shall have the right to participate on the same terms and conditions as the
executive employees of the Company in any stock option and other plans,
including but not limited to the right, at Xx. Xxxxxxxx'x option, to have the
stock options that he holds pursuant to this Agreement repriced or modified
according to the same terms of repricing or modification that are offered in the
future to any other executive employee which holds stock options in the Company.
The Board of Directors of Network Imaging has ratified this repricing of Xx.
Xxxxxxxx'x stock options on September 25, 1997.
Section 4. Agreement to Serve as Assistant Secretary.
The Company hereby agrees to employ Xx. Xxxxxxxx as the Assistant Secretary,
such employment to continue until December 31, 2003, or such other time as Xx.
Xxxxxxxx voluntarily resigns as Assistant Secretary. Such employment will be at
an annual salary of $5,000. Xx. Xxxxxxxx shall receive all health, and dental
insurance benefits afforded to all other Network Imaging executive employees
while employed as Assistant Secretary. Any termination or interruption in Xx.
Xxxxxxxx'x employment as Assistant Secretary will not affect any of Xx.
Xxxxxxxx'x rights as set forth in this Termination Agreement.
Section 5. Survival of Certain Provisions of the Consulting Agreement;
Release.
The parties hereby agree that Sections 9 and 10 of the Consulting Agreement
shall survive for a period of twelve (12) months from the date of execution of
this Agreement. Except with respect to Sections 9 and 10 of the Consulting
Agreement, the Company hereby releases BCG, and Xx. Xxxxxxxx from any and all
other obligations under the Consulting Agreement.
Section 6. Demand Registration Right.
At the written request of Xx. Xxxxxxxx made at any time prior to termination of
this Agreement or within one (1) year thereafter provided the Company is
eligible to file a registration statement on Form S-3, the Company agrees
promptly to prepare and file a registration statement with the Securities and
Exchange Commission to register under the Securities Act of 1933, as amended
(the "Securities Act"), for sale by Xx. Xxxxxxxx of any or all shares of Network
Imaging Common Stock, $.0001 par value per share, held by Xx. Xxxxxxxx, or
issuable to Xx. Xxxxxxxx upon the exercise of stock options held by Xx.
Xxxxxxxx, to use its best efforts to have such registration statement declared
effective as promptly as practicable and to maintain such registration statement
in effect for not less than two (2) years from its effective date. The Company
shall bear any and all costs of the sale of the securities pursuant to the
registration statement, except for fees payable to broker-dealers or to counsel
for Xx. Xxxxxxxx which fees will be borne by Xx. Xxxxxxxx. Prior to the
effective date of the registration statement, the Company and Xx. Xxxxxxxx will
enter into an agreement providing for reciprocal indemnification and
contribution substantially in the form customarily appearing in underwriting
agreements issued by investment bankers. The Company will use its best efforts
to register or qualify the securities under the securities laws or blue sky laws
of such jurisdictions as Xx. Xxxxxxxx reasonably requires. The registration
rights set forth in this section may be transferred to any transferee who
acquires securities from Xx. Xxxxxxxx; provided, however, that the Company is
given written notice by Xx. Xxxxxxxx at the time of such transfer stating the
name and address of the transferee and identifying the securities with respect
to which the rights are being assigned, and provided further, however, that
registration rights may not be transferred to any person in connection with the
acquisition of shares in a transaction that was registered under the Securities
Act.
Section 7. Waiver of Breach.
Forbearance by a party to require performance of any provision hereof shall not
constitute or be deemed a waiver by such party of such provision or of the right
thereafter to enforce the same, and no waiver by a party of any breach or
default hereunder shall constitute or be deemed a waiver of any subsequent
breach or default, whether of the same or similar nature or of any other nature,
or a waiver of the provision or provisions breached or with respect to which
such default occurred.
Section 8. Notices.
All notices and other communications required or permitted hereunder shall be in
writing and may be personally delivered, deposited in the United States mail
(certified mail, postage prepaid, return receipt requested), transmitted by
telecopier or telex, or sent by a private messenger or carrier which issues
delivery receipts, addressed to the party for whom they are intended at the
following addresses:
Address for the Company: Network Imaging Corporation
000 Xxxxxxx Xxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxx
Facsimile No.: (000) 000-0000
Address for Xx. Xxxxxxxx: 00000 Xxxxxxxx Xxxx
Xxxxx Xxxxx, Xxxxxxxx 00000
Facsimile No.: (000) 000-0000
Such notices and other communications shall be deemed effective upon receipt.
The above addresses may be changed by notice given pursuant to this Section 8.
Section 9. Severability.
The invalidity or unenforceability of any provision of this Agreement shall not
invalidate or render unenforceable any other provisions of this Agreement.
Section 10. Binding Effect.
The rights and obligations of the Company and Xx. Xxxxxxxx under this Agreement
shall inure to the benefit of and be binding upon them and their respective
successors and assigns. This Agreement shall be binding upon Xx. Xxxxxxxx and,
except that Xx. Xxxxxxxx may not delegate his obligations hereunder, shall inure
to the benefit of Xx. Xxxxxxxx and his heirs, executors and administrators.
Section 11. Governing Law.
This Agreement shall be governed by, and construed under and in accordance with,
the substantive laws of the Commonwealth of Virginia, without regard to choice
of law issues.
Section 12. Cancellation of Prior Agreement.
This Agreement hereby supersedes the Consulting Agreement already defined in the
preamble. The Consulting Agreement is hereby terminated, canceled and annulled
as of the effective date of this Agreement.
Section 13. Arbitration.
In the event a dispute arises between the parties to this Agreement relating to
this Agreement and/or any aspect of the employment relationship, both the
Company and Xx. Xxxxxxxx consent to mandatory arbitration before a single
arbitrator of the American Arbitration Association in McLean, Virginia under the
Commercial Rules of the AAA in lieu of litigation and a trial by jury. The
parties hereby consent to the entry of judgment upon award rendered by the
arbitrator in any court of competent jurisdiction. Notwithstanding the
foregoing, should adequate grounds exist for seeking immediate injunctive
relief, either party hereto may seek and obtain such relief provided that, upon
its obtaining such relief, such action shall be stayed pending the resolution of
arbitration proceedings.
Section 14. Entire Agreement.
This instrument embodies the entire agreement and understanding among the
parties hereto with respect to the subject matter hereof. This Agreement may not
be changed, modified or amended in whole or in part except by a writing signed
by all the parties. No waiver of any party's rights hereunder shall be effective
or binding unless such waiver shall be in writing and signed by the party
against whom such waiver is sought to be enforced.
Section 15. Execution In Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall
be deemed to be an original but all of which shall constitute one and the same
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of this 30 day
of October, 1997.
Network Imaging Corporation
By: /s/ X. Xxxx
--------------------------
Print Name: X. Xxxx
Title: CHMN & CEO
Date: 11/17/97
BCG, Inc.
By: /s/ Xxxxxx Xxxxxxxx
---------------------------
Print Name: Xxxxxx Xxxxxxxx
Title: President
Date: 11/14/97
Xx. Xxxxxx X. Xxxxxxxx
By: /s/ Xxxxxx Xxxxxxxx
-----------------------------
Xx. Xxxxxx X. Xxxxxxxx
Date: 11/14/97
