Exhibit 10.1







			
	Exhibit 10.1	 	Separation Agreement, dated January 31, 2011, by and between
Streamline Health Solutions, Inc., a Delaware corporation and
J. Brian Patsy.





SEPARATION AGREEMENT




This Separation Agreement (the “Agreement”) is entered into on this 31st day of
January, 2011, by and between Streamline Health Solutions, Inc., a Delaware corporation (the
“Company”), and J. Brian Patsy (the “Executive”).



WHEREAS, the Executive is currently the President and Chief Executive Officer of the Company
and a member of its Board of Directors; and



WHEREAS, the Company and the Executive desire to set forth herein their mutual agreement with
respect to the matters addressed herein, including matters pertaining to the Executive’s cessation
of his employment and positions with the Company, certain other matters pertaining to the
Executive’s consulting relationship with the Company following the Executive’s cessation of
employment and the Executive’s release of claims, all upon the terms set forth herein.



NOW, THEREFORE, in consideration of the mutual promises and agreements contained herein, the
adequacy and sufficiency of which are hereby acknowledged, the Company and the Executive hereby
agree as follows:



Section 1 Termination of Employment and Service. As of January 31, 2011 (the
“Date of Termination”), the Executive shall cease to be an employee, officer and director
of the Company.



Section 2 Payment of Accrued Amounts; Accrued Benefits; Equity Awards. Not later
than 15 calendar days after the Date of Termination, the Company shall pay to the Executive all
amounts, if any, due to the Executive for earned salary and accrued vacation through the Date of
Termination. Executive shall also receive the bonus earned by the Executive in 2010 pursuant to the
terms of the 2010 Executive Bonus Plan. Such bonus shall be paid at the same time and in the same
form as specified under the 2010 Executive Bonus Plan. Executive’s rights to receive benefits
accrued or payable under the Company’s employee benefit plans shall be governed by the terms of
such plans. Stock options held by Executive and which have vested as of the Date of Termination
shall remain exercisable in accordance with the terms of the 2005 Incentive Compensation Plan. On
the Date of Termination, the Executive shall vest in 13,311 shares of restricted stock and 12,500
options that were originally scheduled to vest on March 31, 2011 and April 7, 2011, respectively,
and all other unvested stock options, restricted stock and other equity awards shall terminate
immediately upon the Date of Termination. In addition, not later than 30 calendar days after the
Date of Termination, the Company shall reimburse the Executive in accordance with the Company’s
policies and procedures for all proper expenses incurred by the Executive in the performance of his
duties through the Date of Termination.


 


 









 





Section 3 Post-Termination Benefits.



Item 3.01 Severance Benefit. The Company shall pay to the Executive a cash payment
in an aggregate gross amount equal to $303,823, consisting of two years of car allowance equal to
$14,400 and a severance payment equal to $289,423 (collectively, the “Severance Benefit”).
The Severance Benefit shall be payable in a lump sum payment within 90 calendar days following the
Date of Termination.



Item 3.02 Employee Benefits. Provided that the Executive timely elects to receive
continued coverage under the Company’s group medical and dental plans pursuant to the Consolidated
Omnibus Budget Reconciliation Act of 1986, as amended (“COBRA”), from the Date of Termination
through the two-year anniversary of the Date of Termination, the Executive (and any qualified
dependents) shall be entitled to group health insurance coverage under the Company’s group health
and dental insurance plans for employees (as such plans are then in effect and as it may be amended
at any time and from time to time during the period of coverage) in which Executive was
participating immediately prior to the Date of Termination, at the Company’s expense. The period
during which the Executive is being provided with health insurance under this Agreement shall be
credited against Executive’s period of COBRA coverage, if any. If the Executive is entitled to any
benefit under the current terms and conditions of any employee benefit plan of the Company that is
accrued and vested on the Date of Termination and that is not expressly referred to in this
Agreement, such benefit shall be provided to the Executive in accordance with the terms and
conditions of such employee benefit plan.



Item 3.03 Compliance with Agreement. Notwithstanding anything herein to the
contrary, if the Executive breaches the terms of this Agreement and the Executive does not cure
such breach (if curable) within 30 calendar days after receipt of written notice from the Company
describing such breach, the Executive shall forfeit any and all rights to the post-termination
payments made or to be made pursuant to this Section 3. 




Section 4 Consulting Arrangement.



Item 4.01 Consulting Services. The Company hereby agrees to retain the Executive as a
consultant, and the Executive hereby agrees to be retained by the Company, upon the terms and
subject to the conditions hereof for the period commencing on the Date of Termination and ending on
the three-month anniversary of the Date of Termination, unless earlier terminated pursuant to this
Section 4 (such period, the “Consulting Period”). During the Consulting Period, the Executive
shall perform consulting services for up to five days per month, at the Company’s election, and
shall be compensated at a gross rate of $1,500 for each such day that the Company elects to engage
the Executive; provided, however, that if the Company and Executive so agree, the
Executive may be retained for more than five days per month and shall be compensated for each
additional hour of consulting services performed by the Executive at a rate of $200 per hour.
Subject to the prior approval of the Company and in accordance with Section 19 of the Agreement,
the Company shall reimburse the Executive in accordance with the Company’s policies and procedures
for all proper expenses incurred by the Executive in the performance of his consulting duties
during the Consulting Period. In accordance with the terms of this Agreement, the Executive shall
comply with reasonable requests for the Executive’s consulting services and shall devote his
reasonable best efforts, skill and attention to the performance of such consulting services;
provided, however, that nothing in this Section 4 shall
preclude Executive from accepting employment with or providing services to any other person or
entity (provided such employment or services are not prohibited by Section 10 hereof) and the
Company agrees that any consulting services requested hereunder shall not interfere with
Executive’s employment or services. The Executive shall take his direction as a consultant solely
from the Company’s Board of Directors or Chief Executive Officer and President and shall not
interact with any of the Company’s other employees or directors in his capacity as a consultant,
except to the extent he is directed to do so by the Board of Directors or Chief Executive Officer
and President.


 


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Item 4.02 Termination. This Section 4 may be terminated at any time (i) by the
Executive on 15 calendar days prior written notice to the Company and (ii) by the Company upon
written notice to the Executive. In the event of Executive’s termination of the Consulting Period,
the Executive shall forfeit any and all rights to the Severance Benefits and employer-provided
COBRA premiums to be paid to or on behalf of Executive pursuant to Section 3.



Section 5 Federal and State Withholding. The Company shall deduct from any
compensation payable by the Company to the Executive the amount of all taxes required to be
withheld under applicable law with respect to such payments. For purposes of determining all
applicable tax withholdings, any compensation recognized by the Executive upon the exercise of the
Executive’s stock options in accordance with the terms of the 2005 Incentive Compensation Plan and
the amounts to be paid to Executive pursuant to Section 3 hereof shall be treated as wages subject
to all applicable withholding requirements.



Section 6 Return of Company Property. Promptly following the Termination Date (but
in no event later than ten business days following such date), the Executive shall return to the
Company all property of the Company in the Executive’s possession or under the Executive’s control,
including but not limited to any office, computing or communications equipment; provided,
however, that the Executive shall retain the Company-provided home desktop and laptop
computers, printer and cell phone; provided, further, that the Executive shall
allow the Company to delete all Company information from such computers and cell phone.




Section 7 Release of Claims.



The Executive, on behalf of himself and anyone claiming through him, including, but not
limited to, his past, present and future spouses, family members, relatives, agents, attorneys,
representatives, heirs, executors and administrators, and the predecessors, successors and assigns
of each of them, hereby releases and agrees not to sue the Company or any of its divisions,
subsidiaries, affiliates, other related entities (whether or not such entities are wholly owned) or
the owners, officers, directors, agents, attorneys or representatives thereof, or the predecessors,
successors or assigns of each of them (hereinafter jointly referred to as the “Company Released
Parties”), with respect to any and all known or unknown claims which the Executive now has, has
ever had, or may in the future have, against any of the Company Released Parties for or related in
any way to anything occurring from the beginning of time up to and including the date on which he
signs this Agreement, including, without limiting the generality of the foregoing, any and all
claims which in any way result from, arise out of, or relate to, the Executive’s employment by any
of the Company Released Parties or



 


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the termination of such employment, including, but not limited
to, any and all claims for severance
or termination payments under any agreement between the Executive and any of the Company Released
Parties or any program or arrangement of any of the Company Released Parties or any claims that
could have been asserted by the Executive or on his behalf against any of the Company Released
Parties in any federal, state or local court, commission, department or agency under any fair
employment, contract or tort law, or any other federal, state or local law, regulation or ordinance
(as in effect or amended from time to time), including, without limitation, the Age Discrimination
in Employment Act, Title VII of the Civil Rights Act of 1964, the Employee Retirement Income
Security Act of 1974, the Americans with Disabilities Act, the Family and Medical Leave Act, or
under any compensation, bonus, severance, retirement or other benefit plan; provided,
however, that nothing contained in this Section 7 shall apply to, or release the Company
from (i) any obligation contained in this Agreement, (ii) any obligation which the Company may have
to provide benefits to the Executive under any plans or programs of the Company which continue to
be applicable to the Executive, except as otherwise expressly provided in this Agreement, (iii) any
obligation which the Company may have to indemnify the Executive pursuant to its articles of
incorporation, by-laws, or other governing documents, or (iv) any obligation which the Company may
have to provide coverage to the Executive pursuant to its director and officer insurance policy
with respect to actions or omissions of the Executive during his service as a director or officer
of the Company. The Executive expressly represents and warrants that he has not filed or had filed
on his behalf any claim against any of the Company Released Parties, and has not transferred or
assigned any rights or causes of action that he might have against any of the Company Released
Parties.



Executive represents that he has had the opportunity and time to consult with his own legal
counsel concerning the provisions of this Agreement and that he has been given up to twenty-one
(21) calendar days from the date of the Company’s signature as set forth below to consider this
Agreement and determine whether to accept and sign this Agreement. Following his acceptance and
signing of this Agreement, Executive has seven (7) calendar days to revoke the Agreement by
delivering notice of revocation to the Company in accordance with Section 14.



Section 8 Authority. The Executive expressly represents and warrants that the
Executive is the sole owner of the actual and alleged claims, demands, rights, causes of action and
other matters that are released herein; that the same have not been transferred or assigned or
caused to be transferred or assigned to any other person, firm, corporation or other legal entity;
and that the Executive has the full right and power to grant, execute and deliver the general
release, undertakings and agreements contained herein.



Section 9 Non-Admissions. Nothing in this Agreement is intended to or shall be
construed as an admission by the Company or any of the other Company Released Parties that any of
them violated any law, interfered with any right, breached any obligation or otherwise engaged in
any improper or illegal conduct. The Company and the other Company Released Parties expressly deny
any such illegal or wrongful conduct.




Section 10 Noncompetition and Nonsolicitation.



Item 10.01 The Executive agrees, on behalf of himself and his affiliates, that he and his
affiliates are subject to and bound by the restrictive covenants and acknowledgements included in
the Employment Agreement, effective February 1, 2004, among LanVision Systems,
Inc., LanVision, Inc. and J. Brian Patsy, as amended (the “Employment Agreement”), including,
without limitation, the covenants and acknowledgements included in Sections 7, 8, 9, 12 and 14
(collectively, the “Restrictive Covenants”), and for purposes of Section 9 of the Employment
Agreement, the period of non-competition and non-solicitation shall continue for twelve (12) months
following the Date of Termination.


 


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Section 11 Nondisparagement. The Executive will not, nor will he cause or assist any
other person to, make any statement to a third party or take any action which is intended to or
would reasonably have the effect of disparaging or harming the Company or the business reputation
of the Company; provided, however, that this provision shall not preclude such
truthful disclosure or testimony as may be required by a court of law, by any governmental agency
having supervisory authority over the business of the Company or by any administrative or
legislative body (including a committee thereof) with apparent jurisdiction to order him to make
such disclosure or provide such testimony.



Section 12 Cooperation with the Company. Executive agrees to cooperate fully with
the Company and its counsel with respect to any litigation, investigation, government proceedings
or general claims which relate to matters with which Executive was involved during the term of
employment or service with the Company, subject to reimbursement of reasonable out-of-pocket travel
costs and expenses. Such cooperation may include appearing from time to time at the offices of the
Company or the Company’s counsel, or telephonically, for conferences and interviews and providing
testimony in depositions, court proceedings and administrative hearings as necessary for the
Company to defend or prosecute claims, and in general providing the Company and its counsel with
the full benefit of Executive’s knowledge with respect to any such matter. Executive agrees to
render such cooperation in a timely fashion and at such times as may be mutually agreeable to the
parties concerned.



Section 13 Notices. All notices and other communications required or permitted
hereunder shall be in writing and shall be deemed given when (a) delivered personally or by
overnight courier to the following address of the other parties hereto (or such other address for
such parties as shall be specified by notice given pursuant to this Section) or (b) sent by
facsimile to the following facsimile number of the other parties hereto (or such other facsimile
number for such parties as shall be specified by notice given pursuant to this Section), with the
confirmatory copy delivered by overnight courier to the address of such parties pursuant to this
Section 14:




If to the Company, to:




Streamline Health Solutions, Inc.

10200 Alliance Road, Suite 200

Cincinnati, OH 45242-4716

Attn: Chairman of the Board of Directors

Facsimile: 630-563-0743




With a copy to:




Sidley Austin LLP

One South Dearborn Street

Chicago, IL 60603

Attn: John P. Kelsh

Facsimile: 312-853-7036




If to Executive, to:




J. Brian Patsy

At the most recent address on file with the Company


 


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Section 14 Severability. Whenever possible, each provision of this Agreement shall
be interpreted in such manner as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under
applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall
not affect the validity, legality or enforceability of any other provision of this Agreement or the
validity, legality or enforceability of such provision in any other jurisdiction, but this
Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.



Section 15 Entire Agreement. This Agreement shall constitute the entire agreement
and understanding between the parties with respect to the subject matter hereof and supersedes and
preempts any prior understandings, agreements (including, without limitation, the Employment
Agreement and all equity award agreements between the Company and the Executive) or representations
by or between the parties, written or oral, which may have related in any manner to the subject
matter hereof; provided, however, that, notwithstanding the foregoing, this
Agreement shall not supersede or preempt the Restrictive Covenants included in the Employment
Agreement. The Executive acknowledges that the Company has not made any representations regarding
the tax consequences of payments under this Agreement and that Executive has had the opportunity to
consult Executive’s tax advisor, if any.



Section 16 Successors and Assigns. This Agreement shall be enforceable by Executive
and Executive’s heirs, executors, administrators and legal representatives, and by the Company and
its successors and assigns. Executive may not assign this Agreement and any such assignment shall
be null and void.



Section 17 Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the State of Ohio without regard to principles of
conflict of laws.



Section 18 Amendment and Waiver. The provisions of this Agreement may be amended or
waived only by the written agreement of the Company and Executive, and no course of conduct or
failure or delay in enforcing the provisions of this Agreement shall affect the validity, binding
effect or enforceability of this Agreement.


 


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Section 19 Section 409A. This Agreement is intended to comply with the requirements
of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and shall be
interpreted and construed consistently with such intent. The payments to the Executive pursuant to
this Agreement are also intended to be exempt from Section 409A of the
Code to the maximum extent possible, under either the separation pay exemption pursuant to
Treasury regulation §1.409A-1(b)(9)(iii) or as short-term deferrals pursuant to Treasury regulation
§1.409A-1(b)(4), and for purposes of the separation pay exemption, each installment paid to the
Executive under this Agreement shall be considered a separate payment. In the event the terms of
this Agreement would subject the Executive to taxes or penalties under Section 409A of the Code
(“409A Penalties”), the Company and Executive shall cooperate diligently to amend the terms of the
Agreement to avoid such 409A Penalties, to the extent possible; provided that in no event shall the
Company be responsible for any 409A Penalties that arise in connection with any amounts payable
under this Agreement. To the extent any amounts under this Agreement are payable by reference to
Executive’s “Date of Termination,” such term shall be deemed to refer to the Executive’s
“separation from service,” within the meaning of Section 409A of the Code. Notwithstanding any
other provision in this Agreement, in no event shall the level of consulting services to be
provided by the Executive pursuant to Section 4 of this Agreement exceed more than 20% of the
average of services performed by the Executive for the Company and its affiliated “service
recipients” (within the meaning of Treasury regulation §1.409A-1(h)(3)) over the immediately
preceding 36-month period. Notwithstanding any other provision in this Agreement, if the Executive
is a “specified employee,” as defined in Section 409A of the Code, as of the date of the
Executive’s separation from service, then to the extent any amount payable under this Agreement (i)
constitutes the payment of nonqualified deferred compensation, within the meaning of Section 409A
of the Code, (ii) is payable upon the Executive’s separation from service and (iii) under the terms
of this Agreement would be payable prior to the six-month anniversary of the Executive’s separation
from service, such payment shall be delayed until the earlier to occur of (a) the six-month
anniversary of the separation from service or (b) the date of the Executive’s death. Any
reimbursement payable to the Executive pursuant to this Agreement shall be conditioned on the
submission by the Executive of all expense reports reasonably required by the Company under any
applicable expense reimbursement policy, and shall be paid to the Executive within 30 calendar days
following receipt of such expense reports, but in no event later than the last day of the calendar
year following the calendar year in which the Executive incurred the reimbursable expense. Any
amount of expenses eligible for reimbursement, or in-kind benefit provided, during a calendar year
shall not affect the amount of expenses eligible for reimbursement, or in-kind benefit to be
provided, during any other calendar year. The right to any reimbursement or in-kind benefit
pursuant to this Agreement shall not be subject to liquidation or exchange for any other benefit.



Section 20 Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed to be an original and all of which together shall constitute one and
the same instrument.



[SIGNATURE PAGE FOLLOWS]



 


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



	 	 	 	 	 
	 	STREAMLINE HEALTH SOLUTIONS, INC.

 	 
	 	By:  	/s/ Jonathan R. Phillips
 	 
	 	 	Name:  	Jonathan R. Phillips 	 
	 	 	Its:  	Chairman 	 
	 	 	 
	 	                                            /s/ J. Brian Patsy
 	 
	 	J. Brian Patsy 	 



[SIGNATURE PAGE TO J. BRIAN PATSY SEPARATION AGREEMENT]





 


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