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Sample Business Contracts

Employment Agreement - Netsmart Technologies Inc. and Anthony F. Grisanti

Employment Forms

  • Employment Agreement. Employers can customize an employment agreement that states the salary, benefits, working hours and other important provisions for their new or existing employee.
  • Consulting Agreement. Answer simple questions to build a contract with a consultant. Specify the services rendered, when payment is due, as well as IP rights.
  • Commission Agreement. Employers who compensate their sales employees based on commissions can prepare an agreement to reduce misunderstandings by specifying the base salary and how commissions are calculated.
  • Executive Employment Agreement. Companies may offer their business executives a contract that is different from the one provided to their regular employees. Executive employment agreements may be more complex because the compensation structure may include a combination of salary and commissions, provide for bonuses based on sales, stock or other financial targets, and include non-compete, confidentiality and severance provisions.
  • Sales Representative Contract. Independent sales representatives offer companies the potential to increase the sale of products or services without the burden of increasing headcount. Both parties should understand how commissions are calculated, when commissions will be paid, as well as how the representative will treat confidential information from the company and whether the representative may also sell a competing line of products or services.
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                              EMPLOYMENT AGREEMENT

         AGREEMENT dated as of the 1st day of January, 2001 by and between
Netsmart Technologies, Inc., a Delaware corporation with its principal office at
146 Nassau Avenue, Islip, New York 11751 (the "Company"), and Anthony F.
Grisanti, residing at 45 Knollcrest Road, Nesconset, New York 11767 (the
"Executive").

                                   WITNESSETH:

         WHEREAS, the Company has engaged Executive as its chief financial
officer and desires to continue to obtain the benefits of Executive's knowledge,
skill and ability in connection with managing the operations of the Company and
to continue to employ Executive on the terms and conditions hereinafter set
forth; and

         WHEREAS, Executive desires to provide his services to the Company and
to accept employment by the Company on the terms and conditions hereinafter set
forth;

         NOW, THEREFORE, in consideration of the mutual promises set forth in
this Agreement, the parties agree as follows:

         1. Employment and Duties.
            ---------------------

                  (a) Subject to the terms and conditions hereinafter set forth,
the Company hereby employs the Executive as its Chief Financial Officer, and he
shall have the duties and responsibilities associated with the chief financial
officer of a public corporation. During the Employment Term, as hereinafter
defined, the Executive shall report to the Company's chief executive officer.
Executive shall also perform such other duties and responsibilities as may be
determined by the Company's board of directors or chief executive officer (the
"Board"), as long as such duties and responsibilities are consistent with those
of the Chief Financial Officer.

                  (b) The Executive shall serve as a director of the Company or
any of its subsidiaries, if elected, and in such executive capacity or
capacities with respect to any affiliate of the Company to which he may be
elected or appointed, provided that such duties are consistent with those of the
Company's Chief Financial Officer. During the Employment Term, the Executive
shall receive no additional compensation for services rendered pursuant to this
Paragraph 1(b).

                  (c) Unless terminated earlier as provided for in Paragraph
1(d) or 5 of this Agreement, this Agreement shall have an initial term (the
"Initial Term") commencing as of the date of this Agreement and expiring on
December 31, 2003. The Executive shall have the right, on notice given not later
than sixty (60) days prior to the end of the Initial Term, to extend the term
for a period of one (1) year. The Initial Term and the one-year extension are
collectively referred to as the "Employment Term."

                  (d) Notwithstanding the provisions of Paragraph 1(c) of this
Agreement, as long as this Agreement shall not have been terminated pursuant to
Paragraph 5(a), (b) or (c) of this Agreement, the Executive, on ninety (90) days

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written notice to the Board, shall have the right to terminate the Employment
Term, in which event the Employment Term shall end on the date set forth in such
notice with the same effect as if such date were the last day of the Employment
Term set forth in Paragraph 1( c) of this Agreement.

                  (e) Immediately following the Employment Term, whether the
Employment Term shall have expired pursuant to Paragraph 1(c) of this Agreement
or terminated by the Executive pursuant to Paragraph 1(d) of this Agreement, but
excluding any termination by the Company pursuant to Paragraph 5(a), (b) or (c)
of this Agreement, the Executive shall serve as a consultant to the Company
during the Consulting Term. The Consulting Term shall mean the five (5) year
period immediately following the expiration or termination of the Employment
Term. The Employment Term and the Consulting Term are collectively referred to
as the Term.

                  (f) During the Consulting Term the Executive shall serve as a
consultant to the Company and shall report to such executive officer as shall be
designated by the Company's chief executive officer. The nature of the
Executive's services during the Consulting Term shall be as mutually agreed upon
by the Company's chief executive officer and the Executive, and may include
services relating to the Company's strategy for marketing its products and
developing its business plan. The Executive shall be required to devote such
time to his services for the Company as he may determine, it being understood
that the services being rendered during the Consulting Term shall not be the
Executive's principal activity and that the Executive may engage in such
business, charitable and personal activities as he may determine, subject to the
provisions of Paragraphs 6, 7 and 8 of this Agreement. In rendering services
during the Consulting Term, the Company shall not require the Executive to
perform services which would interfere with his other business, charitable and
personal activities or which would require him to return from or change his
plans for any vacations, and, if he so elects, the Executive may perform such
services from his residence.

         2. Executive's Performance. Executive hereby accepts the employment
            -----------------------
contemplated by this Agreement. During the Employment Term, Executive shall
devote substantially all of his business time to the performance of his duties
under this Agreement, and shall perform such duties diligently, in good faith
and in a manner consistent with the best interests of the Company.

         3. Compensation and Other Benefits.
            -------------------------------

                  (a) (i) For his services to the Company during the Employment
Term, the Company shall pay the Executive an annual salary ("Salary") for the
year 2001 at the rate of $127,679.00 to be increased on January 1, 2002 and on
each January 1st thereafter by a percentage equal to the greater of five percent
(5%) or the cost of living increase. All Salary payments shall be payable in
such installments as the Company regularly pays its executive officers, but not
less frequently than semi-monthly.

                           (ii) The cost of living increase shall be computed as
follows:

                                    (A) The cost of living index, as hereinafter
defined, for each January, commencing January 2002, shall be compared with the

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cost of living index for January of the previous year. The cost of living
increase shall mean the percentage increase in the cost of living index from the
previous January to the January as of which the computation is made. Such
determination shall be made as soon as possible after release of the cost of
living index for which the computation is being made, and the Company shall, on
the next payroll date, pay to the Executive as additional Salary, any back
Salary not paid pending determination of the cost of living increase.

                                    (B) The cost of living index shall mean the
"Consumers Price Index for Urban Wage Earners and Clerical Workers (Revised
Series) - New York Metropolitan Area," published by the Bureau of Labor
Statistics of the United States Department of Labor. If the cost of living index
in its form as of the date of this Agreement or the calculation basis thereof
shall be revised therefrom or discontinued, the parties shall make an
appropriate adjustment in the provisions of this Paragraph 3(a).

                                    (C) As used in this Agreement, the term
"Salary" shall mean the salary in effect at the time of the relevant event after
giving effect to any adjustments made pursuant
to this Paragraph 3(a).

                  (b) If the Compensation Committee of the Board establishes a
bonus pool for the Company's key management employees, which plan may be based
on a percentage of the Company's net income or such other formula as the
Compensation Committee may determine, the Executive shall participate in the
bonus pool. The size of the bonus pool and the extent of Executive's
participation in the bonus pool will be determined by the Compensation
Committee, whose determination shall be final, binding and conclusive on the
Company and Executive. If for any year no bonus pool is established, the
Executive shall be eligible for a discretionary bonus by the Compensation
Committee or the Board. Any bonus payments made to the Executive shall
hereinafter be referred to as a "Bonus."

                  (c) During the Consulting Term, the Executive shall receive
compensation at the annual rate of $75,000, payable in regular monthly
installments payable the first day of each month. In addition, if the Executive
is elected as a director of the Company during the Consulting Term, he shall be
entitled to such compensation and other benefits as are provided to other
independent directors.

                  (d) In addition to Salary and Bonus, the Executive shall
receive the following benefits during the Term:

                           (i) Major medical health insurance for the Executive
and members of his immediate family.

                           (ii) Accident and life insurance and officer's life
insurance to the extent such benefits are provided to the Company's executive
officers and long-time disability insurance which is presently in effect for the
Executive; provided that during the Consulting Term such insurance shall only be
provided to Executive and members of his immediate family to the extent
permitted by the Company's insurers.

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<PAGE>

                           (iii) Long-term medical care insurance to the extent
that the Company is able, by using reasonable

efforts, to obtain such coverage for an annual premium which does not exceed
$3,000. To the extent that the annual premium for such coverage exceeds $3,000,
if the Executive desires such coverage, he shall be responsible for the
additional premiums.

                           (iv) An automobile allowance of $1,000 per month
payable monthly.

                           (v) Vacation in accordance with Company policy.

                  (e) Subsequent to the Term, and for the balance of the
Executive's life, the Company will obtain major medical health insurance for the
Executive and his spouse which, to the extent practical, is comparable with the
major medical health insurance provided from time to time by the Company to its
employees; provided, that to the extent that such insurance costs the Company
more than $400 per month, any excess shall be paid by the Executive. In the
event that the Executive is or can be covered by major medical insurance by
another company during the Consulting Term or thereafter, the Company shall not
be required to provide such benefits to the Executive.

                  (f) In the event of a termination of Executive's employment as
a result of his death or Disability, as hereinafter defined, the Company shall
continue to pay to Executive or his beneficiary, his Salary at the annual rate
in effect at the date of death or termination resulting from a Disability, until
the earlier of (i) six (6) months from the date of death or such termination or
(ii) the expiration of the Term.

                  (g) Any payments ("disability insurance payments") received by
Executive pursuant to a disability policy obtained through the Company (whether
paid for by the Company or Executive) shall be applied on a dollar-for-dollar
basis to reduce the Salary or disability payments payable by the Company
pursuant to this Agreement during the period when such disability insurance
payments are being made.

                  (h) As used in this Agreement, the term "Cash Compensation"
shall include Salary, Bonus, automobile expenses and vacation pay. One month's
Cash Compensation shall mean one twelfth (1/12) of the sum of (i) the annual
Salary, (ii) the Bonus for previous year, (iii) the annual automobile allowance
plus (iv) the annual vacation pay. During the Consulting Term, references to
"Salary" shall mean the annual compensation payable pursuant to Paragraph 3(c)
of this Agreement.

                  (i) In the event that, during the Fee Payment Period, the
Company consummates a Covered Transaction, the Company shall (x) issue to the
Executive the Warrants in respect of the Equity Consideration paid by Company in
the Covered Transaction and (y) pay to the Executive the Cash Fee with respect
to Other Consideration in the Covered Transaction which is either paid by or
received by the Company, its stockholders or any other party to the Covered
Transaction or the stockholders of any other party to the Covered Transaction.
As used in this Paragraph 3(i), the following terms shall have the meanings set
forth below:

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                           (i) The Fee Payment Period shall mean the period
commencing on the date of this Agreement and ending on the first to occur of (A)
December 31, 2004, (B) the date on which the Executive resigns from the Company
other than (x) pursuant to Paragraph l(d) or 5(e) of this Agreement or (y) upon
expiration of the Term, or (C) the date of termination of employment if this
Agreement is terminated pursuant to Paragraph 5(c).

                           (ii) A Covered Transaction shall mean a Transaction
(other than an Excluded Transaction) with another party who is introduced to the
Company directly or indirectly by the Executive during the Fee Payment Period if
the Transaction is closed during the Fee Payment Period. If the Transaction
involves more than one closing or the issuance of securities or other
consideration on more than one occasion, the Transaction shall be a Covered
Transaction if the initial closing or the initial payment or issuance of
consideration occurs during the Fee Payment Period.

                           (iii) A Transaction shall mean any of the following:

                                    (A) Any merger, consolidation, sale by the
Company of all or substantially all of its business or assets or the sale of the
stock, business or assets of any subsidiary; regardless of whether the
consideration is paid to the Company or its stockholders.

                                    (B) The acquisition by the Company of any
the stock or assets of any other corporation, partnership, limited liability
company, regardless of whether the consideration is paid to the other entity or
its stockholders, partners, members or other holders of beneficial interests
therein, other than the purchase of capital assets or other assets by the
Company in the normal course of business.

                                    (C) Any joint venture or similar transaction
pursuant to which the Company and one or more other parties contribute funds or
assets, including intellectual property rights, to a third party.

                                    (D) Any licensing, distribution or similar
transaction in which the Company pays or receives consideration for the grant or
receipt of licensing, distribution, marketing or similar rights.

                                    (E) Any other transaction which results in a
business combination.

                           (iv) An Excluded Transaction shall mean a Transaction
with respect to which either (x) the Executive introduced the Company to an
investment banker or finder or other third party who receives a commission, fee
or other compensation with respect to the Transaction or (y) a Transaction which
is brought to the attention of the Executive in the Executive's position of
chief executive officer or a director of or a consultant to the Company. With
respect to Excluded Transaction, the Board or the Compensation Committee shall
have the right to issue to the Executive Warrants or pay a Cash Fee which is
less than the amount provided for in this Paragraph 3(i).

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<PAGE>

                           (v) The Equity Consideration shall mean the shares of
the Company's common stock or Convertible Securities issued by the Company in a
Covered Transaction.

                           (vi) Convertible Securities shall mean warrants,
convertible debt, convertible preferred stock or other debt or equity
instruments or agreements upon the exercise or conversion of which or pursuant
to the terms of which shares of the Company's common stock may be issued.

                           (vii) Warrants shall mean warrants to purchase such
number of shares of common stock as equals two percent (2%) of the total number
of shares of common stock issued in the Covered Transaction. The number of
shares of common stock to be issued in the Covered Transaction shall include all
shares of common stock which are issuable upon the conversion or exercise of or
pursuant to the terms of Convertible Securities which are issued in the Covered
Transaction. The Warrants shall have a term of five years from the date of
issuance, provide for a cashless exercise and shall include provisions which
protect the holder in the event that the Company shall (A) pay a dividend or
make a distribution on its shares of common stock in shares of common stock or
convertible securities, (B) subdivide or reclassify its outstanding common stock
into a greater number of shares or otherwise effect a stock split, or (C)
combine or reclassify its outstanding common stock into a smaller number of
shares or otherwise effect a reverse split. The exercise price of the Warrants
shall be equal to the closing price of the common stock as reported on the
principal market on which the common stock is traded on the date of the
execution of the definitive agreement relating to the Transaction or the
closing date (or initial closing date if there are more than one closing),
whichever price is lower. The holder of the Warrants shall have piggyback
registration rights with respect to the shares of common stock issuable upon
exercise of the Warrants, subject to the customary right of the Company's
underwriters' to exclude such shares from the registration statement as long as
the holders of the Warrants are not treated less favorably than any other
persons with piggyback registration rights. If the Covered Transaction requires
the filing of a registration statement in connection with the issuance by the
Company of shares of common stock or Convertible Securities in the Transaction,
the shares of common stock issuable upon exercise or conversion of the Warrant
shall be included in such registration statement.

                           (viii) The Cash Fee shall be one percent (1%) of the
Other Consideration.

                           (ix) The Other Consideration shall mean any
consideration of any kind and description, including equity (other than Equity
Consideration), cash, notes or other evidences of indebtedness, Convertible
Securities, assets which are issued or paid by the Company, the other party to
the Transaction or a third party; provided, however, that liabilities assumed by
the acquiring party shall not be included in Other Consideration. In the case of
a joint venture or similar Covered Transaction in which both the Company and one
or more other parties issue or pay consideration, the Other Consideration shall
include the consideration paid by all parties.  Other consideration shall be
valued as follows:

                                    (A) If the Other Consideration consists of
promissory notes, debentures or other evidences of indebtedness which are not

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Convertible Securities, the Other Consideration with respect thereto shall be
the principal amount thereof.

                                    (B) Any consideration paid to any party in
respect of a covenant not to compete or similar covenant and any consideration
paid to executives to the extent that the consideration exceeds the amount which
would otherwise be paid to such executive based on his or her compensation
package in effect prior to the negotiations relating to the Covered Transaction
shall be included in Other Consideration.

                                    (C) Any equity consideration, including
Convertible Securities, shall be based on the closing price of the common stock
on the principal market on which the common stock is traded on the date of the
closing of the Covered Transaction. For purpose of determining the Other
Consideration, Convertible Securities shall have a value equal to the value of
the shares of common stock issuable upon conversion or exercise of the
Convertible Securities, less any consideration required to be paid pursuant to
the term of the Convertible Securities for the issuance of the common stock;
provided, that if Convertible Securities are issued and there is a public market
for the Convertible Securities, then the Convertible Securities shall be based
on the closing price of the Convertible Security on the principal market on
which the Convertible Securities are traded on the date of the closing of the
Covered Transaction.

                                    (D) Notwithstanding the provisions of
Paragraph 3(i)(viii)(C), if the securities to be issued in the Covered
Transaction are to be publicly traded commencing on or about the closing date,
the securities shall be valued based on the average of the closing prices of the
securities for the twenty (20) consecutive trading days commencing five (5)
trading days after the closing of the Covered Transaction.

                           (x) If all or a portion of the Equity Consideration
or Other Consideration payable in connection with a Covered Transaction includes
future payments, then the Company shall issue to the Executive any additional
Warrants and pay to the Executive any additional cash fee, determined in
accordance with this Agreement, when, and if such payments are paid.

                           (xi) In the event that there is a conflict as to
whether a Transaction was brought to the attention of the Company by the
Executive or another person or in the event that more than one person brought
the Transaction to the attention of the Company, the determination of the
persons entitled to compensation as a result of the Transaction shall be
determined by the Board, it being understood that the total compensation payable
to the Executive and any other officers, directors or consultants under this
provision or similar provisions contained in the employment or consulting
agreement shall not exceed (A) Warrants to purchase two percent (2%) of the
Equity Consideration and (B) a Cash Fee of one percent (1%) of the Other
Consideration.

                           (xii) The Board may, with the consent of the
Executive, provide compensation to the Executive for services rendered in
connection with a business transaction which is different from the compensation
described in this Paragraph 3(i), including, by way of illustration, a phantom
stock program in which the Executive and other executives of the Company
participate.

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         4. Reimbursement of Expenses. The Company shall reimburse Executive,
            -------------------------
upon presentation of proper expense statements, for all authorized, ordinary and
necessary out-of-pocket expenses reasonably incurred by Executive during the
Term in connection with the performance of his services pursuant to this
Agreement hereunder in accordance with the Company's expense reimbursement
policy.

         5. Termination of Employment.
            -------------------------

                  (a) This Agreement and Executive's employment and consulting
relationship hereunder shall terminate immediately upon the death of the
Executive.

                  (b) This Agreement and Executive's employment and consulting
relationship pursuant to this Agreement, may be terminated by the Executive or
the Company on not less than thirty (30) days' written notice in the event of
Executive's Disability. The term "Disability" shall mean any illness, disability
or incapacity of the Executive which prevents him from substantially performing
his regular duties for a period of three (3) consecutive months or four (4)
months, even though not consecutive, in any twelve (12) month period. However,
if the Executive is covered by long-term disability insurance, the Company may
not terminate this Agreement pursuant to this Paragraph 5(b) unless the
Executive is eligible for disability payments under his long-term disability
insurance.

                  (c) The Company may terminate this Agreement and the
Executive's employment and consulting relationship pursuant to this Agreement
for cause, in which event no further Cash Compensation shall be payable to
Executive subsequent to the date of such termination. The term "Cause" shall
mean (i) repeated failure to perform material instructions from the Company's
chief executive officer, provided that such instructions are reasonable and
consistent with Executive's duties as set forth in Paragraph 1 of this
Agreement, (ii) a breach of Paragraphs 6, 7 or 8 of this Agreement; (iii) a
breach of trust whereby the Executive obtains personal gain or benefit at the
expense of or to the detriment of the Company; or (iv) a conviction of the
Executive of any felony. If the Company proposes to terminate this Agreement
pursuant to clauses (i), (ii) or (iii) of this Paragraph 5( c), the Company
shall notify the Executive in writing setting forth in reasonable detail the
basis for the proposed termination, and the Executive shall have a reasonable
opportunity to respond to the Board and to be represented before the Board by
counsel. If this Agreement is terminated pursuant to clause (iv) of this
Agreement, and the conviction is subsequently reversed on appeal, the Company
shall pay the Executive his Salary for the balance of the Employment Term. For
purposes of clauses (iv) of this Agreement, a guilty plea or plea of nolo
contendere or similar plea shall be deemed to be a conviction.

                  (d) In the event that the Company terminates Executive's
employment other than (i) as provided in Paragraphs 5(a), (b) and (c) or (ii) as
a result of or following a change of control (other than as provided in
Paragraph 5(e) of this Agreement), the Company shall pay to Executive as
severance payments (A) his Salary as provided in this Agreement for the balance
of the Term, (B) the Bonus paid to Executive for the previous year, both of

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which shall be paid in twelve (12) equal monthly installments commencing within
the month following the month in which Executive's termination occurs.

                  (e) (i) In the event that, following a change of control, as
hereinafter defined, Executive is either dismissed other than for cause, or
resigns for any reason, or his employment is terminated as a result of a
Disability, the Company shall pay Executive severance pay in an amount
(determined at the rate in effect on the date of dismissal or resignation) equal
to the sum of (A) twelve (12) months' Cash Compensation plus (B) the applicable
number of months' Cash Compensation, all of which shall be paid to the Executive
on the date of the termination of his employment or consulting relationship. The
applicable number of months shall be the greater of (x) thirty (30) or (y) one
and one-half (1.5) multiplied by the number of full or partial years during
which the Executive served as an officer or director of or consultant to the
Company, with service as an officer of Creative Socio-Medics Corp. ("CSM") and
its predecessor being counted as service as an officer of the Company; provide,
that in no event shall the applicable number of months exceed thirty six (36).

                           (ii) A change of control shall occur or be deemed to
have occurred if (A) any "person" (as such term is used in Sections 13(d) and 14
(d)(2) of the Securities Exchange Act of 1934, as amended) is or becomes the
beneficial owner, directly or indirectly, of securities of the Company
representing twenty five (25%) percent or more of the combined voting power of
the Company's then outstanding securities, or (B) during any period of two (2)
consecutive years, individuals who at the beginning of such period constitute
the Board cease for any reason to constitute a least a majority thereof unless
the election of each new director was nominated, ratified or approved by at
least two-thirds (2/3) of the directors then still in office who were either
directors at the beginning of such period or who were elected or appointed with
the approval or ratification of at least two-thirds (2/3) of the directors who
were directors at the beginning of such period, or (C) the Board of Directors
shall have determined that an event, other than as described in clauses (A) and
(B) of this Paragraph 5(e)(ii), results in a change of control, or (D) a CSM
Disposition, as hereinafter defined. For purposes of clause (B) of this
Paragraph 5(e)(ii), the directors at the beginning of the initial period shall
mean Messrs. Edward D. Bright, James L Conway, John F. Philips, Gerald Koop, and
Joseph G. Sicinski.

                           (iii) A CSM Disposition shall mean a transaction,
however structured, as a result of which the Company ceases to own the business
presently being conducted by CSM, as the same business may be developed in the
future, and includes, but is not limited to, a sale by CSM of all or a
substantial portion of its business and assets, the sale by the Company of all
or substantially all of the stock of CSM (provided that a public offering by CSM
shall not be treated as a CSM Disposition), the merger or consolidation of CSM
with or into another corporation if, as a result thereof, the Company ceases to
own a controlling interest in CSM.

                  (f) In the event of any termination of Executive's employment
or consulting relationship hereunder, including termination for cause as
provided for herein, Executive shall be entitled to all rights under the
Company's benefit plans which had vested as of the date of termination of his
employment or his consulting relationship. In addition, for a period of eighteen
(18) months after any such termination, the Company shall provide Executive and,

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to the extent permitted by the Company's insurance plans, his eligible family
members with the hospitalization, life insurance, medical and major medical
benefits which would have been provided to Executive if he had continued in the
employ of or as a consultant to the Company pursuant to this Agreement, except
that the Company shall not be required to provide life insurance coverage for
any family member.

         6. Trade Secrets and Proprietary Information. Executive recognizes and
            -----------------------------------------
acknowledges that the Company, through the expenditure of considerable time and
money, has developed and will continue to develop in the future information
concerning customers, clients, marketing, products, services, business, research
and development activities and operational methods of the Company and its
customers or clients, contracts, financial or other data, technical data or any
other confidential or proprietary information possessed, owned or used by the
Company, the disclosure of which could or does have a material adverse effect on
the Company, its business, any business it proposes to engage in, its
operations, financial condition or prospects and that the same are confidential
and proprietary and considered "confidential information" of the Company for the
purposes of this Agreement. In consideration of his employment and engagement as
a consultant, Executive agrees that he will not, during or after the Term,
without the consent of the chief executive officer, make any disclosure of
confidential information now or hereafter possessed by the Company, to any
person, partnership, corporation or entity either during or after the term here
of, except that nothing in this Agreement shall be construed to prohibit
Executive from using or disclosing such information (a) if such disclosure is
necessary in the normal course of the Company's business in accordance with
Company policies or instructions or authorization from the chief executive
officer, (b) such information shall become public knowledge other than by or as
a result of disclosure by a person not having a right to make such disclosure,
(c) complying with legal process; provided, that in the event Executive is
required to make disclosure pursuant to legal process, Executive shall give the
Company prompt notice thereof and the opportunity to object to the disclosure,
or (d) subsequent to the Term, if such information shall have either (i) been
developed by Executive independent of any of the Company's confidential or
proprietary information or (ii) been disclosed to Executive by a person not
subject to a confidentiality agreement with or other obligation of
confidentiality to the Company. For the purposes of Paragraphs 6, 7 and 8 of
this Agreement, the term "Company" shall include the Company, its parent, its
subsidiaries and affiliates.

         7. Covenant Not To Solicit or Compete.
            ----------------------------------

                  (a) During the period from the date of this Agreement until
one (1) year following the date on which Executive's employment or consulting
relationship is terminated, Executive will not, directly or indirectly:

                           (i) Persuade or attempt to persuade any person or
entity which is or was a customer, client or supplier of the Company to cease
doing business with the Company, or to reduce the amount of business it does
with the Company (the terms "customer" and "client" as used in this Paragraph 7
to include any potential customer or client to whom the Company submitted bids
or proposals, or with whom the Company conducted negotiations, during the term
of Executive's employment or consulting relationship hereunder or during the
twelve (12) months preceding the termination of his employment or consulting
relationship, as the case may be);

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                           (ii) solicit for himself or any other person or
entity other than the Company the business of any person or entity which is a
customer or client of the Company, or was a customer or client of the Company
within one (1) year prior to the termination of his employment or consulting
relationship;

                           (iii) persuade or attempt to persuade any employee of
the Company, or any individual who was an employee of the Company during the one
(1) year period prior to the lawful and proper termination of this Agreement, to
leave the Company's employ, or to become employed by any person or entity other
than the Company; or

                           (iv) engage in any business in the United States
whether as an officer, director, consultant, partner, guarantor, principal,
agent, employee, advisor or in any manner, which directly competes with the
business of the Company as it is engaged in at the time of the termination of
this Agreement, unless, at the time of such termination or thereafter during the
period that the Executive is bound by the provisions of this Paragraph 7, the
Company ceases to be engaged in such activity, provided, however, that nothing
in this Paragraph 7 shall be construed to prohibit the Executive from owning an
interest of not more than five (5%) percent of any public company engaged in
such activities.

                  (b) The Executive acknowledges that the restrictive covenants
(the "Restrictive Covenants") contained in Paragraphs 6 and 7 of this Agreement
are a condition of his employment and his consulting relationship are reasonable
and valid in geographical and temporal scope and in all other respects. If any
court determines that any of the Restrictive Covenants, or any part of any of
the Restrictive Covenants, is invalid or unenforceable, the remainder of the
Restrictive Covenants and parts thereof shall not thereby be affected and shall
remain in full force and effect, without regard to the invalid portion. If any
court determines that any of the Restrictive Covenants, or any part thereof, is
invalid or unenforceable because of the geographic or temporal scope of such
provision, such court shall have the power to reduce the geographic or temporal
scope of such provision, as the case may be, and, in its reduced form, such
provision shall then be enforceable.

                  (c) The Company acknowledges that the payment of Cash
Compensation to Executive is a necessary prerequisite to Executive being bound
by the Restrictive Covenants. If the Company fails to pay to Executive his Cash
Compensation, or any part hereof, within ten business days after receipt of
written notice of such failure, Executive shall be relieved of his obligations
to comply with the Restrictive Covenants.

         8. Inventions and Discoveries. Executive agrees promptly to disclose in
            --------------------------
writing to the Company any invention or discovery made by him during the period
of time that this Agreement remains in full force and effect, whether during or
after working hours, in any business in which the Company is then engaged or
which otherwise relates to any product or service dealt in by the Company and
such inventions and discoveries shall be the Company's sole property. Upon the
Company's request, Executive shall execute and assign to the Company all
applications for copyrights and letters patent of the United States and such
foreign countries as the Company may designate, and Executive shall execute and
deliver to the Company such other instruments as the Company deems necessary to
vest in the Company the sole ownership of all rights, title and interest in and
to such inventions and discoveries, as well as all copyrights and/or patents. If

                                       11
<PAGE>

services in connection with applications for copyrights and/or patents are
performed by Executive at the Company's request after the termination of his
employment hereunder, the Company shall pay him reasonable compensation for such
services rendered after termination of this Agreement.

         9. Injunctive Relief. Executive agrees that his violation or threatened
            -----------------
violation of any of the provisions of Paragraphs 6, 7 or 8 of this Agreement
shall cause immediate and irreparable harm to the Company. In the event of any
breach or threatened breach of any of said provisions, Executive consents to the
entry of preliminary and permanent injunctions by a court of competent
jurisdiction prohibiting Executive from any violation or threatened violation of
such provisions and compelling Executive to comply with such provisions. This
Paragraph 9 shall not affect or limit, and the injunctive relief provided in
this Paragraph 9 shall be in addition to, any other remedies available to the
Company at law or in equity or in arbitration for any such violation by
Executive. In the event an injunction is issued against any such violation by
Executive, the period referred to in Paragraph 7 of this Agreement shall
continue until the later of the expiration of the period set forth therein or
one (1) month from the date a final judgment enforcing such provisions is
entered and the time for appeal has lapsed. Subject to Paragraph 7(c) of this
Agreement, the provisions of Paragraphs 6, 7, 8 and 9 of this Agreement shall
survive any termination of this Agreement and Executive's employment and
consulting relationship pursuant to this Agreement.

         10. Indemnification. The Company shall provide Executive with payment
             ---------------
of legal fees and indemnification to the maximum extent permitted by the
Company's Certificate of Incorporation, By-Laws, and the Delaware General
Corporation Law.

         11. Miscellaneous.
             -------------

                  (a) (i) Executive represents, warrants, covenants and agrees
that he has a right to enter into this Agreement, that he is not a party to any
agreement or understanding, oral or written, which would prohibit performance of
his obligations under this Agreement, and that he will not use in the
performance of his obligations hereunder any proprietary information of any
other party which he is legally prohibited from using.

                           (i) The Company represents, warrants and agrees that
it has full power and authority to execute and deliver this Agreement and
perform its obligations hereunder. The Company further represents, warrants and
agrees that the Agreement: (A) has been duly authorized by the Board and no
other corporate action is required of the Company to enter into this Agreement
and perform its obligations hereunder; (B) does not require the consent of any
third party; and (C) does not violate any law, regulation, rule or material
agreement, mortgage, bond, pledge, note or other instrument to which it or its
properties are bound.

                  (b) Executive will cooperate with the Company in connection
with the Company's application to obtain key-man life insurance on his life, on
which the Company will be the beneficiary. Such cooperation shall include the
execution of any applications or other documents requiring his signature and
submission of insurance applications and submission to a physical.

                  (c) Any notice, consent or communication required under the
provisions of this Agreement shall be given in writing and sent or delivered by
hand, overnight courier or messenger service, against a signed receipt or

                                       12
<PAGE>

acknowledgment of receipt; or by registered or certified mail, return receipt
requested, or te1ecopier or similar means of communication if receipt is
acknowledged or if transmission is confirmed by mail as provided in this
Paragraph 11 (c), to the parties at their respective addresses set forth at the
beginning of this Agreement or by telecopier to the Company at (631) 968-2123 or
to Executive at ( ) , with notice to the Company being sent to the attention of
the individual who executed this Agreement on behalf of the Company. Either
party may, by like notice, change the person, address or telecopier number to
which notice is to be sent. If no telecopier number is provided for Executive,
notice to him shall not be sent by telecopier.

                  (d) This Agreement shall in all respects be construed and
interpreted in accordance with, and the rights of the parties shall be governed
by, the laws of the State of New York applicable to contracts executed and to be
performed wholly within such State, without regard to principles of conflicts of
laws except that the provisions of Paragraph 10 shall be governed by the
Delaware General Corporation law.

                  (e) Except for actions, suits, or proceedings taken pursuant
to or under Paragraph 6, 7, 8 or 9 of this Agreement, any dispute concerning
this Agreement or the rights of the parties hereunder shall be submitted to
binding arbitration in New York City before a single arbitrator under the rules
of the American Arbitration Association. The award of the arbitrator shall be
final, binding and conclusive on all parties, and judgment on such award may be
entered in any court having jurisdiction. The arbitrator shall have the power,
in his discretion, to award counsel fees and costs to the prevailing party. The
arbitrator shall have no power to modify or amend any specific provision of this
Agreement except as expressly provided in Paragraph 11(f) of this Agreement.

                  (f) Notwithstanding the provisions of Paragraph 11(e) of this
Agreement, with respect to any claim for injunctive relief or other equitable
remedy pursuant to Paragraph 9 of this Agreement or any claim to enforce an
arbitration award or to compel arbitration, the parties hereby (i) consents to
the exclusive jurisdiction of the United States District Court for the Southern
or Eastern District of New York and Supreme Court of the State of New York in
the County of New York or Suffolk, (ii) agree that ally process in any action
commenced in such court under this Agreement may be served upon him personally,
either (A) by certified or registered mail, return receipt requested, or by
Federal Express or other courier service which obtains evidence of delivery,
with the same full force and effect as if personally served upon him in New York
City or Suffolk County, as the case may be, or (B) by any other method of
service permitted by law, and (iii) waives any claim that the jurisdiction of
any such court is not a convenient forum for any such action and any defense of
lack of in personam jurisdiction with respect thereof.

                  (g) If any term, covenant or condition of this Agreement or
the application thereof to any party or circumstance shall, to any extent, be
determined to be invalid or unenforceable, the remainder of this Agreement, or
the application of such term, covenant or condition to parties or circumstances
other than those as to which it is held invalid or unenforceable, shall not be
affected thereby and each term, covenant or condition of this Agreement shall be
valid and be enforced to the fullest extent permitted by law, and any court or
arbitrator having jurisdiction may reduce the scope of any provision of this
Agreement, including the geographic and temporal restrictions set forth in
Paragraph 7 of this Agreement, so that it complies with applicable law.

                                       13
<PAGE>

                  (h) This Agreement constitute the entire agreement of the
Company and Executive as to the subject matter hereof, superseding all prior or
contemporaneous written or oral understandings or agreements, including any and
all previous employment agreements or understandings, all of which are hereby
terminated, with respect to the subject matter covered in this Agreement. This
Agreement may not be modified or amended, nor may any right be waived, except by
a writing which expressly refers to this Agreement, states that it is intended
to be a modification, amendment or waiver and is signed by both parties in the
case of a modification or amendment or by the party granting the waiver. No
course of conduct or dealing between the parties and no custom or trade usage
shall be relied upon to vary the terms of this Agreement. The failure of a party
to insist upon strict adherence to any term of this Agreement on any occasion
shall not be considered a waiver or deprive that party of the right thereafter
to insist upon strict adherence to that term or any other term of this
Agreement.

                  (i) Neither party hereto shall have the right to assign or
transfer any of its or his rights hereunder except in connection with a merger
of consolidation of the Company or a sale by the Company of all or substantially
all of its business and assets.

                  (j) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, successors, executors,
administrators and permitted assigns.

                  (k) The headings in this Agreement are for convenience of
reference only and shall not affect in any way the construction or
interpretation of this Agreement.

                  (1) No delay or omission to exercise any right, power or
remedy accruing to either party hereto shall impair any such right, power or
remedy or shall be construed to be a waiver of or an acquiescence to any breach
hereof. No waiver of any breach hereof shall be deemed to be a waiver of any
other breach hereof theretofore or thereafter occurring. Any waiver of any
provision hereof shall be effective only to the extent specifically set forth in
an applicable writing. All remedies afforded to either party under this
Agreement, by law or otherwise, shall be cumulative and not alternative and
shall not preclude assertion by such party of any other rights or the seeking of
any other rights or remedies against any other party.

                         [Signatures on following page]


                                       14
<PAGE>



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

NETSMART TECHNOLOGIES, INC.

By:      /s/*
         --------------------------------
         Edward D. Bright
         Chairman, Compensation Committee

By:      /s/*
         --------------------------------
         James L. Conway
         Chief Executive Officer

EXECUTIVE:

/s/*
---------------------------------------
         Anthony Grisanti