CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT

                                  By and Among


                           NETWORK IMAGING CORPORATION

                                       and


                   SOUTHBROOK INTERNATIONAL INVESTMENTS, LTD.

                         ______________________________




                         Dated as of September 30, 1996


                         ______________________________














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                                TABLE OF CONTENTS

                                                                          Page

   ARTICLE I         CERTAIN DEFINITIONS  1

         Section 1.1. Certain Definitions.  1

   ARTICLE II        PURCHASE OF SHARES  3

         Section 2.1.  Purchase of Shares; Closing  3

   ARTICLE III       REPRESENTATIONS AND WARRANTIES  4

         Section 3.1.      Representations and Warranties of the Company 
                           4
         Section 3.2.      Representations and Warranties of the
                           Purchaser  8

   ARTICLE IV        OTHER AGREEMENTS OF THE PARTIES 10

         Section 4.1.      Transfer Restrictions 10
         Section 4.2.      Stop Transfer Instruction 11
         Section 4.3.      Furnishing of Information 11
         Section 4.4.      Notice of Certain Events 11
         Section 4.5.      Copies and Use of Disclosure Materials 12
         Section 4.6.      Modification to Disclosure Materials 12
         Section 4.7.      Blue Sky Laws 12
         Section 4.8.      Integration 12
         Section 4.9.      Furnishing of Rule 144A Materials 13
         Section 4.10.     Solicitation Materials 13
         Section 4.11.     Subsequent Financial Statements 13
         Section 4.12.  Right of First Refusal 13
         Section 4.13.  Purchaser Ownership of Common Stock 14
         Section 4.14.  Availability of Common Stock . . . . . . . . . . .  15
         Section 4.15.  Listing of Underlying Shares 15
         Section 4.16.  Conversion Procedures 15
         Section 4.17.     Purchaser's Rights if Trading in Common
                           Stock is Suspended  . . . . . . . . . . . . . .  15
         Section 4.18.     No Violation of Applicable Law  . . . . . . . .  15
         Section 4.19.     Repurchase or Redemption Restrictions . . . . .  16

   ARTICLE V         CONDITIONS PRECEDENT TO CLOSING 16

         Section 5.1.      Conditions Precedent to Obligations of the
                           Purchaser. 16
         Section 5.2.      Conditions Precedent to Obligations of the

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                           Company 18

   ARTICLE VI        TERMINATION 18

         Section 6.1.      Termination by Mutual Consent 18
         Section 6.2.      Termination by the Company or the Purchaser
                           18
         Section 6.3.      Termination by the Company 19
         Section 6.4.      Termination by the Purchaser 19

   ARTICLE VII       MISCELLANEOUS 20

         Section 7.1.      Fees and Expenses 20
         Section 7.2.      Entire Agreement; Amendments 20
         Section 7.3.      Notices 21
         Section 7.4.      Amendments; Waivers 22
         Section 7.5.      Headings 22
         Section 7.6.      Successors and Assigns 22
         Section 7.7.      No Third Party Beneficiaries 22
         Section 7.8.      Governing Law 22
         Section 7.9.      Survival 22
         Section 7.10.  Counterpart Signatures 22
         Section 7.11.  Publicity 23
         Section 7.12.     Severability 23
         Section 7.13.  Remedies 23


   Exhibit A         Certificate of Designation
   Exhibit B         Registration Rights Agreement
   Exhibit C         Form of Opinion of Jones & Blouch, L.L.P., counsel for
                     the Company
   Exhibit D         Conversion Procedures


   Schedule 3.1(a)   Subsidiaries
   Schedule 3.1(c)   Capitalization
   Schedule 3.1(f)   Required Consents and Approvals
   Schedule 3.1(g)   Litigation










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               CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT, dated as of
   September 30, 1996 (this "Agreement"), by and among Network Imaging
   Corporation, a Delaware corporation (the "Company"), and Southbrook
   International Investments, Ltd., a corporation organized and existing under
   the laws of British Virgin Islands (the "Purchaser").

               WHEREAS, the Company desires to issue and sell to the Purchaser
   and the Purchaser desires to acquire shares of the Company's Series J
   Convertible Preferred Stock, par value $.0001 per share (the "Preferred
   Stock").

               IN CONSIDERATION of the mutual covenants and agreements set
   forth herein and for good and valuable consideration, the receipt of which
   is hereby acknowledged, the parties agree as follows:


                                          ICERTAIN DEFINITIONS

               1. Certain Definitions.  As used in this Agreement, and unless
   the context requires a different meaning, the following terms have the
   meanings indicated:

               "Affiliate" means, with respect to any Person, any Person that,
   directly or indirectly, controls, is controlled by or is under common
   control with such Person.  For the purposes of this definition, "control"
   (including, with correlative meanings, the terms "controlled by" and "under
   common control with") shall mean the possession, directly or indirectly, of
   the power to direct or cause the direction of the management and policies
   of such Person, whether through the ownership of voting securities or by
   contract or otherwise.

               "Business Day" means any day except Saturday, Sunday and any
   day which shall be a legal holiday or a day on which banking institutions
   in the state of New York are authorized or required by law or other
   government actions to close.

               "Closing" shall have the meaning set forth in Section 2.1(b).

             "Closing Date" shall have the meaning set forth in Section
   2.1(b).

               "Certificate of Designation" shall have the meaning set forth
   in Section 2.1(a).

               "Code" means the Internal Revenue Code of 1986, as amended, and
   the rules and regulations thereunder as in effect on the date hereof.

               "Commission" means the Securities and Exchange Commission.

               "Common Stock" means the Company's common stock, par value

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   $.0001 per share.

               "Disclosure Materials" means, collectively, the SEC Documents,
   the disclosure package delivered to the Purchaser in connection with the
   offering by the Company of the Shares and the Schedules to this Agreement
   furnished by or on behalf of the Company pursuant to Section 3.1.

               "Exchange Act" means the Securities Exchange Act of 1934, as
   amended.

               "Lien" means, with respect to any asset, any mortgage, lien,
   pledge, encumbrance, charge or security interest of any kind in or on such
   asset or the revenues or income thereon or therefrom.

               "Material Adverse Effect" shall have the meaning set forth in
   Section 3.1(a).

               "Per Share Consideration" shall have the meaning set forth in
   Section 2.1(a).

               "Person" means an individual or a corporation, partnership,
   trust, incorporated or unincorporated association, joint venture, limited
   liability company, joint stock company, government (or an agency or
   political subdivision thereof) or other entity of any kind.

               "Preferred Stock" shall have the meaning set forth in the
   recitals hereto.

               "Purchase Price" shall have the meaning set forth in Section
   2.1(a).

               "Registration Rights Agreement" means the registration rights
   agreement, substantially in the form of Exhibit B, as the same may be
   amended, supplemented or otherwise modified in accordance with its terms.

               "Required Approvals" shall have the meaning set forth in
   Section 3.1(f).

               "SEC Documents" shall have the meaning set forth in Section
   3.1(l).

               "Securities Act" means the Securities Act of 1933, as amended.

               "Shares" means the shares of Preferred Stock purchased by the
   Purchaser pursuant to this Agreement.

               "Subsidiaries" shall have the meaning set forth in Section

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   3.1(a).

               "Underlying Shares" means the shares of Common Stock into which
   the Shares are convertible in accordance with the terms hereof and the
   Certificate of Designation.


                                          IPURCHASE OF SHARES

               1.  Purchase of Shares; Closing.

               (a)   Subject to the terms and conditions herein set forth, the
   Company shall issue and sell to the Purchaser, and the Purchaser shall
   purchase from the Company on the Closing Date 500 Shares, which shall have
   the respective rights, preferences and privileges set forth in Exhibit A
   (the "Certificate of Designation"), at a price per Share of US$10,000 (the
   "Per Share Consideration").  The "Purchase Price" shall equal $5,000,000. 

               (a)   The closing of the purchase and sale of the Shares (the
   "Closing") shall take place at the offices of Robinson Silverman Pearce
   Aronsohn & Berman LLP, 1290 Avenue of the Americas, New York, New York
   10104, immediately following the execution hereof, or at such other time
   and/or place as the Purchaser and the Company may agree, provided, however,
   in no case shall the Closing take place later than the fifth day after the
   last of the conditions listed in Article V is satisfied or waived by the
   appropriate party.  The date of the Closing is hereinafter referred to as
   the "Closing Date".

               (a)   At the Closing, (i) the Company shall deliver to the
   Purchaser (A) one or more stock certificates representing the Shares
   purchased hereunder, registered in the name of the Purchaser and (B) all
   documents, instruments and writings required to have been delivered at or
   prior to Closing by the Company pursuant to this Agreement, (ii) the
   Purchaser shall deliver to the Company (A) the Purchase Price in United
   States dollars in immediately available funds by wire transfer to an
   account designated in writing by the Company prior to the Closing and (B)
   all documents, instruments and writings required to have been delivered at
   or prior to Closing by the Purchaser pursuant to this Agreement.


                                          IREPRESENTATIONS AND WARRANTIES

               1.  Representations and Warranties of the Company.  The Company
   hereby represents and warrants to the Purchaser as follows:

               (a)   Organization and Qualification.  The Company is a
   corporation, duly incorporated, validly existing and in good standing under

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   the laws of the jurisdiction of its incorporation, with the requisite
   corporate power and authority to own and use its properties and assets and
   to carry on its business as currently conducted.  The Company has no
   subsidiaries other than as set forth in the SEC Documents or in Schedule
   3.1(a) (collectively, the "Subsidiaries").  Each of the Subsidiaries is a
   corporation, duly incorporated, validly existing and in good standing under
   the laws of the jurisdiction of its incorporation, with the full corporate
   power and authority to own and use its properties and assets and to carry
   on its business as currently conducted.  Each of the Company and the
   Subsidiaries is duly qualified to do business and is in good standing as a
   foreign corporation in each jurisdiction in which the nature of the
   business conducted or property owned by it makes such qualification
   necessary, except where the failure to be so qualified or in good standing,
   as the case may be, could not reasonably be expected to have, individually
   or in the aggregate, a material adverse effect on the results of
   operations, assets, prospects, or financial condition of the Company and
   the Subsidiaries, taken as a whole (a "Material Adverse Effect").

               (a)   Authorization; Enforcement.  The Company has the
   requisite corporate power and authority to enter into and to consummate the
   transactions contemplated hereby and by the Registration Rights Agreement
   and otherwise to carry out its obligations hereunder and thereunder.  The
   execution and delivery of this Agreement and the Registration Rights
   Agreement by the Company and the consummation by it of the transactions
   contemplated hereby and thereby have been duly authorized by all necessary
   action on the part of the Company.  Each of this Agreement and the
   Registration Rights Agreement has been duly executed and delivered by the
   Company and constitutes the valid and binding obligation of the Company
   enforceable against the Company in accordance with its terms, except as
   such enforceability may be limited by applicable bankruptcy, insolvency,
   reorganization, moratorium, liquidation or similar laws relating to, or
   affecting generally the enforcement of, creditors' rights and remedies or
   by other equitable principles of general application.

               (a)   Capitalization.  The authorized, issued and outstanding
   capital stock of the Company and each of the Subsidiaries is set forth in
   Schedule 3.1(c).  No shares of Common Stock are entitled to preemptive or
   similar rights.  Except as specifically disclosed in Schedule 3.1(c), there
   are no outstanding options, warrants, script rights to subscribe to, calls
   or commitments of any character whatsoever relating to, or, except as a
   result of the purchase and sale of the Shares hereunder and other than
   shares of the Company's Series I Convertible Preferred Stock issued to the
   Purchaser, securities, rights or obligations convertible into or
   exchangeable for, or giving any person any right to subscribe for or
   acquire any shares of Common Stock, or contracts, commitments,
   understandings, or arrangements by which the Company or any Subsidiary is
   or may become bound to issue additional shares of Common Stock, or

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   securities or rights convertible or exchangeable into shares of Common
   Stock.  Neither the Company nor any Subsidiary is in violation of any of
   the provisions of its respective certificate of incorporation, bylaws or
   other charter documents.

               (a)   Issuance of Shares.  The Shares are duly authorized and,
   when paid for in accordance with the terms  hereof, shall be validly
   issued, fully paid and nonassessable.  The Company has and at all times
   while the Shares are outstanding will maintain an adequate reserve of
   shares of Common Stock to enable it to perform its obligations under this
   Agreement and the Certificate of Designation.  When issued in accordance
   with the terms hereof, the Underlying Shares will be duly authorized,
   validly issued, fully paid and nonassessable.

               (a)   No Conflicts.  The execution, delivery and performance of
   this Agreement and the Registration Rights Agreement by the Company and the
   consummation by the Company of the transactions contemplated hereby and
   thereby do not and will not (i) conflict with or violate any provision of
   its certificate of incorporation or bylaws or (ii) subject to obtaining the
   consents referred to in Section 3.1(f), conflict with, or constitute a
   default (or an event which with notice or lapse of time or both would
   become a default) under, or give to others any rights of termination,
   amendment, acceleration or cancellation of, any agreement, indenture or
   instrument to which the Company is a party, or (iii) to the knowledge of
   the Company result in a violation of any law, rule, regulation, order,
   judgment, injunction, decree or other restriction of any court or govern-
   mental authority to which the Company is subject (including Federal and
   state securities laws and regulations), or by which any property or asset
   of the Company is bound or affected, except in the case of each of clauses
   (ii) and (iii), such conflicts, defaults, terminations, amendments, accel-
   erations, cancellations and violations as would not, individually or in the
   aggregate, have a Material Adverse Effect.  The business of the Company is
   not being conducted in violation of any law, ordinance or regulation of any
   governmental authority, except for violations which, individually or in the
   aggregate, do not have a Material Adverse Effect.

               (a)   Consents and Approvals.  Except as specifically set forth
   in Schedule 3.1(f), neither the Company nor any Subsidiary is required to
   obtain any consent, waiver, authorization, or order of, or make any filing
   or registration with, any court or other federal, state, local or other
   governmental authority or other Person in connection with the execution,
   delivery and performance by the Company of this Agreement and the
   Registration Rights Agreement, other than the filing of the registration
   statement covering the Underlying Shares with the Commission and the making
   of the applicable blue-sky filings under state securities laws, each as
   contemplated by the Registration Rights Agreement and other than, in all
   cases, where the failure to obtain such consent, waiver, authorization or

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<PAGE>






   


   order, or to give or make such notice or filing, would not materially
   impair or delay the ability of the Company to effect the Closing and
   deliver to the Purchaser the Shares free and clear of all Liens
   (collectively, the "Required Approvals").

               (a)   Litigation; Proceedings.  Except as specifically dis-
   closed in the Disclosure Materials or in Schedule 3.1(g), there is no
   action, suit, notice of violation, proceeding or investigation pending or,
   to the best knowledge of the Company, threatened against or affecting the
   Company or any of its Subsidiaries or any of their respective properties
   before or by any court, governmental or administrative agency or regulatory
   authority (Federal, State, county, local or foreign) which (i) relates to
   or challenges the legality, validity or enforceability of this Agreement,
   the Registration Rights Agreement or the Shares (ii) could, individually or
   in the aggregate, have a Material Adverse Effect or (iii) could, indi-
   vidually or in the aggregate, materially impair the ability of the Company
   to perform fully on a timely basis its obligations under this Agreement or
   the Registration Rights Agreement.

               (a)   No Default or Violation.  Neither the Company nor any
   Subsidiary (i) is in default under or in violation of any indenture, loan
   or credit agreement or any other agreement or instrument to which it is a
   party or by which it or any of its properties is bound, except such
   conflicts or defaults as do not have a Material Adverse Effect, (ii) is in
   violation of any order of any court, arbitrator or governmental body,
   except for such violations as do not have a Material Adverse Effect, or
   (iii) is in violation of any statute, rule or regulation of any
   governmental authority which could (individually or in the aggregate) (x)
   adversely affect the legality, validity or enforceability of this Agreement
   or the Registration Rights Agreement, (y) have a Material Adverse Effect or
   (z) adversely impair the Company's ability or obligation to perform fully
   on a timely basis its obligations under this Agreement or the Registration
   Rights Agreement.

               (a)   Certain Fees.  No fees or commission will be payable by
   the Company to any broker, finder, investment banker or bank with respect
   to the consummation of the transactions contemplated hereby.

               (a)   Disclosure Materials.  The Disclosure Materials do not
   contain any untrue statement of a material fact or omit to state any
   material fact necessary in order to make the statements made therein, in
   light of the circumstances under which they were made, not misleading.

               (a)   Private Offering.  Neither the Company nor any Person
   acting on its behalf has taken or will take any action (including, without
   limitation, any offering of any securities of the Company under
   circumstances which would require the integration of such offering with the

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   offering of the Shares under the Securities Act) which might subject the
   offering, issuance or sale of the Shares to the registration requirements
   of Section 5 of the Securities Act.

               (a)   SEC Documents.  The Company has filed all reports
   required to be filed by it under the Exchange Act, including pursuant to
   Section 13(a) or 15(d) thereof, for the two years preceding the date hereof
   (or such shorter period as the Company was required by law to file such
   material) (the foregoing materials being collectively referred to herein as
   the "SEC Documents") on a timely basis, or has received a valid extension
   of such time of filing.  As of their respective dates, the SEC Documents
   complied in all material respects with the requirements of the Securities
   Act and the Exchange Act and the rules and regulations of the Commission
   promulgated thereunder, and none of the SEC Documents, when filed,
   contained any untrue statement of a material fact or omitted to state a
   material fact required to be stated therein or necessary in order to make
   the statements therein, in light of the circumstances under which they were
   made, not misleading.  The financial statements of the Company included in
   the SEC Documents comply as to form in all material respects with
   applicable accounting requirements and the published rules and regulations
   of the Commission with respect thereto.  Such financial statements have
   been prepared in accordance with generally accepted accounting principles
   applied on a consistent basis during the periods involved, except as may be
   otherwise indicated in such financial statements or the notes thereto, and
   fairly present in all material respects the financial position of the
   Company as of and for the dates thereof and the results of operations and
   cash flows for the periods then ended, subject, in the case of unaudited
   statements, to normal year-end audit adjustments.  Since the date of the
   financial statements included in the Company's last filed Quarterly Report
   on Form 10-Q, there has been no event, occurrence or development that has
   had a Material Adverse Effect which is not specifically disclosed in any of
   the Disclosure Materials.

               (a)   Exclusivity.  The Company shall not issue and sell the
   Series J Convertible Preferred Stock to any other Person than to the
   Purchaser.

               1.  Representations and Warranties of the Purchaser.  The
   Purchaser hereby represents and warrants to the Company as follows:

               (a)   Organization; Authority.  The Purchaser is a corporation
   duly and validly existing and in good standing under the laws of the
   jurisdiction of its incorporation.  The Purchaser has the requisite power
   and authority to enter into and to consummate the transactions contemplated
   hereby and by the Registration Rights Agreement and otherwise to carry out
   its obligations hereunder and thereunder.  The purchase of the Shares by
   the Purchaser hereunder has been duly authorized by all necessary action on

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   the part of the Purchaser.  Each of this Agreement and the Registration
   Rights Agreement has been duly executed and delivered by the Purchaser or
   on its behalf and constitutes the valid and legally binding obligation of
   the Purchaser, enforceable against the Purchaser in accordance with its
   terms, subject to bankruptcy, insolvency, fraudulent transfer,
   reorganization, moratorium and similar laws of general applicability
   relating to or affecting creditors' rights generally and to general
   principles of equity.

               (a)   Investment Intent.  The Purchaser is acquiring the Shares
   and the Underlying Shares for its own account (and/or on behalf of managed
   accounts who are purchasing solely for their own accounts for investment)
   for investment purposes only and not with a view to or for distributing or
   reselling such Shares or Underlying Shares or any part thereof or interest
   therein, without prejudice, however, to the Purchaser's right, subject to
   the provisions of this Agreement and the Registration Rights Agreement, at
   all times to sell or otherwise dispose of all or any part of such Shares or
   Underlying Shares under an effective registration statement under the
   Securities Act and in compliance with applicable State securities laws or
   under an exemption from such registration.

               (a)   Purchaser Status.  At the time the Purchaser (and any
   account for which it is purchasing) was offered the Shares, it (and any
   account for which it is purchasing) was, and at the date hereof, it (and
   any account for which it is purchasing) is, and at the Closing Date, it
   (and any account for which it is purchasing) will be, an "accredited
   investor" as defined in Rule 501(a) under the Securities Act.

               (a)   Experience of Purchaser.  The Purchaser, either alone or
   together with its representatives, has such knowledge, sophistication and
   experience in business and financial matters so as to be capable of
   evaluating the merits and risks of the prospective investment in the
   Shares, and has so evaluated the merits and risks of such investment.

               (a)   Ability of Purchaser to Bear Risk of Investment.  The
   Purchaser is able to bear the economic risk of an investment in the Shares
   and, at the present time, is able to afford a complete loss of such
   investment.

               (a)   Prohibited Transactions.  The Shares to be purchased by
   the Purchaser are not being acquired, directly or indirectly, with the
   assets of any "employee benefit plan", within the meaning of Section 3(3)
   of the Employee Retirement Income Security Act of 1974, as amended.

               (a)   Access to Information.  The Purchaser acknowledges
   receipt of the Disclosure Materials and further acknowledges that it has
   been afforded (i) the opportunity to ask such questions as it has deemed

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<PAGE>






   


   necessary of, and to receive answers from, representatives of the Company
   concerning the terms and conditions of the offering of the Shares and the
   merits and risks of investing in the Shares; (ii) access to information
   about the Company and the Company's financial condition, results of
   operations, business, properties, management and prospects sufficient to
   enable it to evaluate its investment in the Common Stock; and (iii) the
   opportunity to obtain such additional information which the Company
   possesses or can acquire without unreasonable effort or expense that is
   necessary to make an informed investment decision with respect to the
   Shares and to verify the accuracy and completeness of the information
   contained in the Disclosure Materials.

               (a)   Reliance.  The Purchaser understands and acknowledges
   that (i) the Shares are being offered and sold, and the Underlying Shares
   are being offered to it without registration under the Securities Act in a
   private placement that is exempt from the registration provisions of the
   Securities Act and (ii) the availability of such exemption depends in part
   on, and that the Company will rely upon the accuracy and truthfulness of,
   the foregoing representations and the Purchaser hereby consents to such
   reliance.

               The Company acknowledges and agrees that the Purchaser makes no
   representation or warranty with respect to the transactions contemplated
   hereby other than those specifically set forth in Article III herein.

    
                                          IOTHER AGREEMENTS OF THE PARTIES

               1.  Transfer Restrictions.  If the Purchaser should decide to
   dispose of any of the Shares to be purchased by it hereunder (and upon
   conversion thereof, any Underlying Shares), the Purchaser understands and
   agrees that it may do so only (i) pursuant to an effective registration
   statement under the Securities Act, (ii) to the Company or (iii) pursuant
   to an available exemption from registration under the Securities Act. In
   connection with any transfer of any Shares other than pursuant to an
   effective registration statement or to the Company, the Company may require
   that the transferor of such Shares provide to the Company an opinion of
   counsel experienced in the area of United States securities laws selected
   by the transferor, the form and substance of which opinion shall be,
   reasonably satisfactory to the Company, to the effect that such transfer
   does not require registration of such Shares under the Securities Act or
   any State securities laws.

               The Purchaser agrees to the imprinting, so long as appropriate,
   of the following legend on certificates representing the Shares:

               NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE

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         SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES
         AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
         RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER REGULATION D
         PROMULGATED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
         "SECURITIES ACT"), AND, ACCORDINGLY, THEY MAY NOT BE OFFERED OR SOLD
         WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF,
         U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE.  BY ITS
         ACCEPTANCE HEREOF, THE HOLDER OF THESE SECURITIES AGREES THAT IT WILL
         NOT RESELL, PLEDGE OR OTHERWISE TRANSFER THESE SECURITIES OR THE
         SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE, EXCEPT (A)
         PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
         ACT, (B) TO NETWORK IMAGING CORPORATION (THE "COMPANY") OR (C)
         PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE
         SECURITIES ACT.  IF THE PROPOSED TRANSFER IS TO BE MADE OTHER THAN
         PURSUANT TO CLAUSE (A) OR (B) ABOVE, THE HOLDER MUST, PRIOR TO SUCH
         TRANSFER, FURNISH TO THE COMPANY AND THE TRANSFER AGENT SUCH
         CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THEY MAY
         REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
         PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
         THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.  AS USED HEREIN,
         THE TERMS "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN
         TO THEM BY RULE 902 PROMULGATED UNDER THE SECURITIES ACT.

               The legend set forth above may be removed if and when the
   Shares represented by such certificate or the Underlying Shares, as the
   case may be, are disposed of pursuant to an effective registration
   statement under the Securities Act or in the opinion of counsel to the
   Company experienced in the area of United States securities laws such
   legend is no longer required under applicable requirements of the
   Securities Act.  The stock certificates representing the Shares and the
   Underlying Shares shall also bear any other legends required by applicable
   Federal or state securities laws, which legends may be removed when, in the
   opinion of counsel to the Company experienced in the applicable securities
   laws, such legends are no longer required under the applicable requirements
   of such securities laws.  The Company agrees that it will provide the
   Purchaser, upon request, with a substitute stock certificate or
   certificates, free from such legend at such time as such legend is no
   longer applicable.  The Purchaser agrees that, in connection with any
   transfer of Shares or Underlying Shares by it pursuant to an effective reg-
   istration statement under the Securities Act, it will comply with all
   prospectus delivery requirements of the Securities Act.  The Company makes
   no representation, warranty or agreement as to the availability of any
   exemption from registration under the Securities Act with respect to any
   resale of Shares or Underlying Shares.

               1.  Stop Transfer Instruction.  The Purchaser agrees that the
   Company shall be entitled to make a notation on its records and give

   008258-00007/391115.4

                                      -10-
<PAGE>






   


   instructions to any transfer agent of the Company in order to implement the
   restrictions on transfer set forth in this Agreement.

               1.  Furnishing of Information.  As long as the Purchaser owns
   Shares or Underlying Shares, the Company will promptly furnish to it all
   reports filed by the Company pursuant to Section 13(a) or 15(d) of the
   Exchange Act (or if the Company is not at the time required to file reports
   pursuant to such sections, annual and quarterly reports comparable to those
   required by Section 13(a) or 15(d) of the Exchange Act).

               1.  Notice of Certain Events.  The Company shall (i) advise the
   Purchaser promptly after obtaining knowledge thereof, and, if requested by
   the Purchaser, confirm such advice in writing, of (A) the issuance by any
   state securities commission of any stop order suspending the qualification
   or exemption from qualification of the Shares or the Common Stock for
   offering or sale in any jurisdiction, or the initiation of any proceeding
   for such purpose by any state securities commission or other regulatory
   authority, or (B) any event that makes any statement of a material fact
   made in the Disclosure Materials untrue or that requires the making of any
   additions to or changes in the Disclosure Materials in order to make the
   statements therein, in the light of the circumstances under which they are
   made, not misleading, (ii) use its best efforts to prevent the issuance of
   any stop order or order suspending the qualification or exemption from
   qualification of the Shares or the Common Stock under any state securities
   or Blue Sky laws, and (iii) if at any time any state securities commission
   or other regulatory authority shall issue an order suspending the
   qualification or exemption from qualification of the Shares or the Common
   Stock under any such laws, use its best efforts to obtain the withdrawal or
   lifting of such order at the earliest possible time.

               1.  Copies and Use of Disclosure Materials.  The Company shall
   furnish the Purchaser, without charge, as many copies of the Disclosure
   Materials, and any amendments or supplements thereto, as the Purchaser may
   reasonably request.  The Company consents to the use of the Disclosure
   Materials, and any amendments and supplements thereto, by the Purchaser in
   connection with resales of the Shares or the Underlying Shares other than
   pursuant to an effective registration statement.

               1.  Modification to Disclosure Materials.   If any event shall
   occur as a result of which, in the reasonable judgment of the Company or
   the Purchaser, it becomes necessary or advisable to amend or supplement the
   Disclosure Materials in order to make the statements therein, in the light
   of the circumstances at the time the Disclosure Materials were delivered to
   the Purchaser, not misleading, or if it is necessary to amend or supplement
   the Disclosure Materials to comply with applicable law, the Company shall
   promptly prepare an appropriate amendment or supplement to the Disclosure
   Materials (in form and substance reasonably satisfactory to the Purchaser)

   008258-00007/391115.4

                                      -11-
<PAGE>






   


   so that (i) as so amended or supplemented the Disclosure Materials will not
   include an untrue statement of material fact or omit to state a material
   fact necessary in order to make the statements therein, in the light of the
   circumstances existing at the time it is delivered to Purchaser, not
   misleading and (ii) the Disclosure Materials will comply with applicable
   law.

               1.  Blue Sky Laws.  The Company shall cooperate with the
   Purchaser in connection with the qualification of the Shares and the
   Underlying Shares under the securities or Blue Sky laws of such
   jurisdictions as the Purchaser may request and to continue such
   qualification at all times through the third anniversary of the Closing
   Date; provided, however, that neither the Company nor its Subsidiaries
   shall be required in connection therewith to qualify as a foreign
   corporation where they are not now so qualified.

               1.  Integration.  The Company shall not and shall use its best
   efforts to ensure that no Affiliate shall sell, offer for sale or solicit
   offers to buy or otherwise negotiate in respect of any security (as defined
   in Section 2 of the Securities Act) that would be integrated with the offer
   or sale of the Shares or the Underlying Shares in a manner that would
   require the registration under the Securities Act of the sale of the Shares
   or Underlying Shares to the Purchaser.

               1.  Furnishing of Rule 144A Materials.  The Company shall, for
   so long as any of the Shares or Underlying Shares remain outstanding and
   during any period in which it is not subject to Section 13 or 15(d) of the
   Exchange Act, make available to any registered holder of Shares or
   Underlying Shares in connection with any sale thereof and any prospective
   purchaser of such Shares or Underlying Shares from such Person, the
   following information in accordance with Rule 144A(d)(4) under the
   Securities Act:  a brief statement of the nature of the business of the
   Company and the products and services it offers and the Company's most
   recent audited balance sheet and profit and loss and retained earnings
   statements, and similar audited financial statements for such part of the
   two preceding fiscal years as the Company has been in operation.

               1.  Solicitation Materials.  The Company shall not (i)
   distribute any offering materials in connection with the offering and sale
   of the Shares or Underlying Shares other than the Disclosure Materials and
   any amendments and supplements thereto prepared in compliance herewith or
   (ii) solicit any offer to buy or sell the Shares or Underlying Shares by
   means of any form of general solicitation or advertising.

               1.  Subsequent Financial Statements.  The Company shall furnish
   to the Purchaser, promptly after they are filed with the Commission, a copy
   of all financial statements for any period subsequent to the period covered

   008258-00007/391115.4

                                      -12-
<PAGE>






   


   by the financial statements included in the Disclosure Materials.

               1.  Right of First Refusal.  (a)  The Company shall not
   directly or indirectly, without the prior consent of the Purchaser, offer,
   sell, grant any option to purchase, or otherwise dispose (or announce any
   offer, sale, grant or any option to purchase or other disposition) of any
   of its or its Affiliates equity or equity-equivalent securities (a
   "Subsequent Sale") for a period of 90 days after Closing Date, except (i)
   the granting of options to employees, officers and directors under, and the
   issuance of shares upon exercise of options granted under, any stock option
   plan heretofore or hereinafter adopted by the Company; (ii) shares issued
   upon exercise of any currently outstanding warrants and upon conversion of
   any currently outstanding convertible preferred stock disclosed in Schedule
   3.1 and (iii) shares of Common Stock issued upon conversion of Shares in
   accordance herewith, unless (A) the Company provides the Purchaser a
   written notice (the "Subsequent Financing Notice") of its intention to
   effect such Subsequent Financing, which Subsequent Financing Notice shall
   describe in reasonable detail the proposed terms of such Subsequent
   Financing and the amount of proceeds intended to be raised thereunder and
   (B) the Purchaser shall not have notified the Company within forty-eight
   (48) hours of its receipt of the Subsequent Financing Notice of its
   willingness to enter into good faith negotiations to provide (or to cause
   its sole designee to provide) financing to the Company on substantially the
   terms set forth in the Subsequent Financing Notice.  If the Purchaser shall
   fail to notify the Company of its intention to enter into such negotiations
   within such forty-eight (48) hour period, the Company may effect the
   Subsequent Financing substantially upon the terms set forth in the
   Subsequent Financing Notice; provided, that the Company shall provide the
   Purchaser with a second Subsequent Financing Notice, and the Purchaser
   shall again have the right of first refusal set forth above in this
   paragraph (a), if the Subsequent Financing subject to the initial
   Subsequent Financing Notice shall not have been consummated for any reason
   on the terms set forth in such Subsequent Financing Notice within 30 days
   after the date of the initial Subsequent Financing Notice.

               (a)   From the date hereof through the Closing Date, the
   Company shall not and shall cause the Subsidiaries not to, without the
   consent of the Purchaser, (i) amend its Certificate of Incorporation,
   bylaws or other charter documents so as to adversely affect any rights of
   the Purchaser; (ii) split, combine or reclassify its outstanding capital
   stock; (iii) declare, authorize, set aside or pay any dividend or other
   distribution with respect to the Common Stock; (iv) redeem, repurchase or
   offer to repurchase or otherwise acquire shares of its Common Stock; or (v)
   enter into any agreement with respect to any of the foregoing.

               1.  Purchaser Ownership of Common Stock.  The Purchaser may not
   use its ability to convert Shares hereunder or under the terms of the

   008258-00007/391115.4

                                      -13-
<PAGE>






   


   Certificate of Designation to the extent that such conversion would result
   in the Purchaser owning more than 4.9% of the outstanding shares of the
   Common Stock; provided, however, that this Section 4.13 shall not affect
   the Company's right under Section 5 of the Certificate of Designation to
   force the Purchaser to convert Shares under the circumstances set forth in
   such section.  The Company shall, promptly upon its receipt of a Holder
   Conversion Notice tendered by the Purchaser (or its designee) under the
   Certificate of Designation, notify the Purchaser of the number of shares of
   Common Stock outstanding on such date and the number of Underlying Shares
   which would be issuable to the Purchaser (or its designee, as the case may
   be) if the conversion requested in such Conversion Notice were effected in
   full, whereupon, notwithstanding anything to the contrary set forth in the
   Certificate of Designation, the Purchaser may revoke such conversion or
   exercise to the extent that it determines that such conversion or exercise
   would result in the Purchaser owning in excess of 4.9% of such outstanding
   shares of Common Stock.

               1.  Availability of Common Stock.  The Company undertakes to
   use its best efforts to promptly obtain stockholder approval to increase
   the number of shares of Common Stock which it is authorized to issue to at
   least 60,000,000 shares, at such time as the Company would be, if a notice
   of conversion were to be delivered on such date, precluded from converting
   the full number of Shares that remain unconverted at such date due to the
   unavailability of authorized but unissued or re-acquired Common Stock.  

               1.  Listing of Underlying Shares.  The Company shall take all
   steps necessary to cause the Underlying Shares to be approved for listing
   in The NASDAQ National Market (or other national securities exchange or
   market on which the Common Stock is listed) no later than the first day
   after which shares may be converted hereunder by the Purchaser, and shall
   provide to the Purchaser evidence of such listing.

               1.  Conversion Procedures.  Exhibit D attached hereto sets
   forth the procedures with respect to the conversion of the Shares, in-
   cluding the forms of conversion notice to be provided upon conversion,
   instructions as to the procedures for conversion, the form of legal
   opinion, if necessary, that shall be rendered to the Company's transfer
   agent and such other information and instructions as may be reasonably
   necessary to enable the Purchaser to exercise its right of conversion
   smoothly and expeditiously.

               1.  Purchaser's Rights if Trading in Common Stock is Suspended. 
   In the event that at any time within the two-year period after the Closing
   Date trading in the shares of the Common Stock is suspended on the
   principal market or exchange for such shares, at Purchaser's option
   exercisable by written notice to the Company, the Company shall repurchase
   all Shares and all Underlying Shares then held by such Purchaser, at an

   008258-00007/391115.4

                                      -14-
<PAGE>






   


   aggregate purchase price equal to (A) the product of the Per Share Market
   Value (as defined in Certificate of Designation) as of the five (5) Trading
   Days immediately preceding the day of such notice multiplied by the number
   of shares of Common Stock into which the Shares to be purchased are then
   convertible (or in the case of Underlying Shares, the number of Underlying
   Shares to be purchased), plus (B) interest on such amount accruing from the
   15th day to the 30th day after such notice at the rate of 5% per annum,
   from the 31st day to the 60th day at 8% per annum, from the 60th day to the
   90th day at the rate of 12% per annum and from the 90th day until paid at
   the rate of 24% per annum.

               1.  No Violation of Applicable Law.  Notwithstanding any
   provision of this Agreement to the contrary, if any repurchase or
   redemption of shares otherwise required under this Agreement or the
   Registration Rights Agreement would be prohibited by the relevant
   provisions of the Delaware General Corporation Law, such repurchase or
   redemption shall be effected as soon as it is permitted under such law;
   provided, however, that, interest payable by the Company with respect to
   any such redemption or repurchase shall continue to accrue in accordance
   with Section 4.16 during any such period.

               1.  Repurchase or Redemption Restrictions.  Notwithstanding any
   provision of this Agreement to the contrary, if any repurchase or
   redemption of shares otherwise required under this Agreement would be
   prohibited in the absence of consent from any lender of the Company or the
   Subsidiaries, or by the holders of any class of securities of the Company,
   the Company shall use its best efforts to obtain such consent as promptly
   as practicable after the repurchase or redemption is required.  Interest
   payable by the Company with respect to any such redemption or repurchase
   shall continue to accrue in accordance with Section 4.16 until such consent
   is obtained.  Nothing contained in this Section 4.18 shall be construed as
   a waiver by the Purchaser of any rights it may have by virtue of any breach
   of any representation or warranty of the Company herein as to the absence
   of any requirement to obtain any such consent.


                                          ICONDITIONS PRECEDENT TO CLOSING

               1.  Conditions Precedent to Obligations of the Purchaser.  The
   obligation of the Purchaser to purchase the Shares is subject to the
   satisfaction or waiver by the Purchaser, at or prior to the Closing, of
   each of the following conditions:

               (a)   Legal Opinion.  The Purchaser shall have received the
   legal opinion, addressed to it and dated the Closing Date, of Jones &
   Blouch L.L.P., counsel for the Company, substantially in the form of
   Exhibit C;

   008258-00007/391115.4

                                      -15-
<PAGE>






   



               (a)   Accuracy of the Company's Representations and Warranties. 
   The representations and warranties of the Company contained herein and in
   the Registration Rights Agreement shall be true and correct in all material
   respects as of the date when made and as of the Closing Date as though made
   at that time (except that representations and warranties that are made as
   of a specific date need be true in all material respects only as of such
   date);

               (a)   Performance by the Company.  The Company shall have
   performed, satisfied and complied in all material respects with all
   covenants, agreements and conditions required by this Agreement and the
   Registration Rights Agreement to be performed, satisfied or complied with
   by the Company at or prior to the Closing;

               (a)   No Material Adverse Effect.  Since the date of the
   financial statements included in the Company's last filed Quarterly Report
   on Form 10-Q, no event which had a Material Adverse Effect shall have
   occurred which is not disclosed in the Disclosure Materials;

               (a)   No Prohibitions.  The purchase of and payment for the
   Shares (and upon conversion thereof, the Underlying Shares) hereunder (i)
   shall not be prohibited or enjoined (temporarily or permanently) by any
   applicable law or governmental regulation and (ii) shall not subject the
   Purchaser to any penalty, or in its reasonable judgment, other onerous
   condition under or pursuant to any applicable law or governmental
   regulation that would materially reduce the benefits to the Purchaser of
   the purchase of the Shares or the Underlying Shares (provided, however,
   that such regulation, law or onerous condition was not in effect in such
   form at the date of this Agreement);

               (a)   Company Certificates.  The Purchaser shall have received
   a certificate, dated the Closing Date, signed by the Secretary or an
   Assistant Secretary of the Company and certifying (i) that the Company's
   Certificate of Incorporation and By-Laws attached to the Certificate dated
   June 28, 1996, delivered to Newsun Limited in connection with the closing
   of the Series I Convertible Preferred Stock (the "Series I Closing") have
   not been amended or otherwise been modified in any respect, except for the
   filing of the Series I Preferred Stock Certificate of Designation filed in
   connection with the Series I Closing, and that attached thereto is true and
   complete resolutions duly adopted by the Board of Directors of the Company
   authorizing the execution and delivery of this Agreement and the
   Registration Rights Agreement and the issuance and sale of the Shares and
   the Underlying Shares and (ii) the incumbency of officers executing this
   Agreement and the Registration Rights Agreement;

               (a)   Registration Rights Agreement.  The Company shall have

   008258-00007/391115.4

                                      -16-
<PAGE>






   


   executed the Registration Rights Agreement;

               (a)   No Suspensions of Trading in Common Stock.  Trading in
   the Common Stock shall not have been suspended by the Commission or the
   NASDAQ National Market or other national securities exchange or market on
   which the Common Stock is listed or quoted (except for any suspension of
   trading of limited duration solely to permit dissemination of material
   information regarding the Company);

               (a)   Required Approvals.  All Required Approvals shall have
   been obtained; and

               (a)   Delivery of Stock Certificates.  The Company shall have
   delivered to the Purchaser the stock certificate(s) representing the
   Shares, registered in the name of the Purchaser, each in form satisfactory
   to the Purchaser.

               1.  Conditions Precedent to Obligations of the Company.  The
   obligation of the Company to issue and sell the Shares hereunder is subject
   to the satisfaction or waiver by the Company, at or to the Closing, of each
   of the following conditions:

               (a)   Accuracy of the Purchaser's Representations and
   Warranties.  The representations and warranties of the Purchaser shall be
   true and correct in all material respects as of the date when made and as
   of the Closing Date as though made at that time (except that
   representations and warranties that are made as of a specific date need be
   true in all material respects only as of such date);

               (a)   Performance by the Purchaser.  The Purchaser shall have
   performed, satisfied and complied in all material respects with all
   covenants, agreements and conditions required by this Agreement and the
   Registration Rights Agreement to be performed, satisfied or complied with
   by it at or prior to the Closing; and

               (a)   No Prohibitions.  The sale of the Shares (and upon
   conversion thereof, the Underlying Shares) hereunder (i) shall not be
   prohibited or enjoined (temporarily or permanently) by any applicable law
   or governmental regulation and (ii) shall not subject the Company to any
   penalty, or in its reasonable judgment, any other onerous condition under
   or pursuant to any applicable law or governmental regulation that would
   materially reduce the benefits to the Company of the sale of Shares or the
   Underlying Shares to the Purchaser (provided, however, that such
   regulation, law or onerous condition was not in effect in such form at the
   date of this Agreement).



   008258-00007/391115.4

                                      -17-
<PAGE>






   


                                          ITERMINATION

               1.    Termination by Mutual Consent.  This Agreement may be
   terminated at any time prior to Closing by the mutual consent of the
   Company and the Purchaser.

               1.    Termination by the Company or the Purchaser.  This
   Agreement may be terminated prior to Closing by either the Company or the
   Purchaser, by giving written notice of such termination to the other party,
   if:

                     (a)   the Closing shall not have occurred by October 1,
         1996; provided that the terminating party is not then in material
         breach of its obligations under this Agreement in any manner that
         shall have caused the failure referred to in this paragraph (a);

                     (b)   there shall be in effect any statute, rule, law or
         regulation that prohibits the consummation of the Closing or if the
         consummation of the Closing would violate any non-appealable final
         judgment, order, decree, ruling or injunction of any court of or
         governmental authority having competent jurisdiction; or

                     (c)   there shall have been an amendment to Regulation D
         or an interpretive release promulgated or issued thereunder, which,
         in the reasonable judgment of the terminating party, would materially
         adversely affect the transactions contemplated hereby and by the
         Registration Rights Agreement.

               1.    Termination by the Company.  This Agreement may be
   terminated prior to Closing by the Company, by giving written notice of
   such termination to the Purchaser, if the Purchaser has materially breached
   any representation, warranty, covenant or agreement contained in this
   Agreement or the Registration Rights Agreement and such breach is not cured
   within five business days following receipt by the Purchaser of notice of
   such breach.

               1.    Termination by the Purchaser.  This Agreement may be
   terminated prior to Closing by the Purchaser, by giving written notice of
   such termination to the Company, if:

                     (a)   the Company has breached any representation,
         warranty, covenant or agreement contained in this Agreement or the
         Registration Rights Agreement and such breach is not cured within
         five business days following receipt by the Company of notice of such
         breach; 

                     (b)   there has occurred an event since the date of the

   008258-00007/391115.4

                                      -18-
<PAGE>






   


         financial statements included in the Company's last filed Quarterly
         Report on Form 10-Q which could reasonably be expected to have a
         Material Adverse Effect and which is not disclosed in the Disclosure
         Materials; or

                     (c)   trading in the Common Stock has been suspended by
         the Commission or the NASDAQ National Market or other national
         securities exchange or market on which the Common Stock is listed or
         quoted (except for any suspension of trading of limited duration
         solely to permit dissemination of material information regarding the
         Company); or

                     (d) the effectiveness of the Registration Statement
         relating to the Series I Preferred Stock has been suspended for any
         reason.

































   008258-00007/391115.4

                                      -19-
<PAGE>






   


                                          IMISCELLANEOUS

               1.    Fees and Expenses.  Each party shall pay the fees and
   expenses of its advisers, counsel, accountants and other experts, if any,
   and all other expenses incurred by such party incident to the negotiation,
   preparation, execution, delivery and performance of this Agreement.  The
   Company shall pay all stamp and other taxes and duties levied in connection
   with the issuance of the Shares (and upon conversion thereof, the
   Underlying Shares) pursuant hereto.  The Purchaser shall be responsible for
   its own tax liability that may arise as a result of the investment
   hereunder or the transactions contemplated by this Agreement.  Whether or
   not the transactions contemplated by this Agreement are consummated or this
   Agreement is terminated, the Company shall pay (i) all costs, expenses,
   fees and all taxes incident to and in connection with: (A) the preparation,
   printing and distribution of the Disclosure Materials and all amendments
   and supplements thereto (including, without limitation, financial
   statements and exhibits), and all preliminary and final Blue Sky memoranda
   and all other agreements, memoranda, correspondence and other documents
   prepared and delivered in connection herewith (B) the issuance and delivery
   of the Shares and, upon conversion thereof, the Underlying Shares, (C) the
   qualification of the Shares and, upon conversion thereof, the Underlying
   Shares for offer and sale under the securities or Blue Sky laws of the
   several states (including, without limitation, the fees and disbursements
   of the Purchasers' counsel relating to such registration or qualification),
   (D) furnishing such copies of the Disclosure Materials and all amendments
   and supplements thereto, as may reasonably be requested for use in
   connection with resales of the Shares and, upon conversion thereof, the
   Underlying Shares, and (E) the preparation of certificates for the Shares
   and, upon conversion thereof, the Underlying Shares (including, without
   limitation, printing and engraving thereof), (ii) all fees and expenses of
   the counsel and accountants of the Company and (iii) all expenses and
   listing fees in connection with the application for quotation of the
   Underlying Shares in the NASDAQ National Market.

               1.    Entire Agreement; Amendments.  This Agreement, together
   with the Exhibits, Annexes and Schedules hereto, and the Registration
   Rights Agreement contain the entire understanding of the parties with
   respect to the subject matter hereof and supersede all prior agreements and
   understandings, oral or written, with respect to such matters.

               1.    Notices.  Any notice or other communication required or
   permitted to be given hereunder shall be in writing and shall be deemed to
   have been received (a) upon hand delivery (receipt acknowledged) or
   delivery by telex (with correct answer back received), telecopy or
   facsimile (with transmission confirmation report) at the address or number
   designated below (if delivered on a Business Day during normal business
   hours where such notice is to be received), or the first Business Day

   008258-00007/391115.4

                                      -20-
<PAGE>






   


   following such delivery (if delivered other than on a Business Day during
   normal business hours where such notice is to be received) or (b) on the
   second Business Day following the date of mailing by express courier
   service, fully prepaid, addressed to such address, or upon actual receipt
   of such mailing, whichever shall first occur.  The addresses for such
   communications shall be:

               If to the Company:   Network Imaging Corporation
                                        500 Huntmar Park Drive
                                        Herndon, VA  22170
                                        Facsimile No.:  (703) 904-3292
                                        Attn:  Jorge R. Forgues

               With copies to:      Jones & Blouch L.L.P.
                                        1025 Thomas Jefferson Street, N.W.
                                        Suite 405 West
                                        Washington, D.C.  20007
                                        Facsimile No.:  (202) 223-4593
                                        Attn:  John W. Blouch

               If to the Purchaser: Southbrook International  
                                         Investments, Ltd.
                                        c/o Trippoak Advisors, Inc.
                                        630 Fifth Avenue, Suite 2000
                                        New York, NY 10111
                                        Facsimile No.: (212) 332-3256
                                       Attn: Robert L. Miller

               With copies to:      Robinson Silverman Pearce Aronsohn   &
                                        Berman LLP
                                        1290 Avenue of the Americas
                                        New York, NY  10104
                                        Facsimile No.:  (212) 541-4630
                                        Attn:  Kenneth L. Henderson and
                                         Eric L. Cohen

   or such other address as may be designated in writing hereafter, in the
   same manner, by such person.

               1.    Amendments; Waivers.  No provision of this Agreement may
   be waived or amended except in a written instrument signed, in the case of
   an amendment, by both the Company and the Purchaser, or, in the case of a
   waiver, by the party against whom enforcement of any such waiver is sought. 
   No waiver of any default with respect to any provision, condition or
   requirement of this Agreement shall be deemed to be a continuing waiver in
   the future or a waiver of any other provision, condition or requirement
   hereof, nor shall any delay or omission of either party to exercise any

   008258-00007/391115.4

                                      -21-
<PAGE>






   


   right hereunder in any manner impair the exercise of any such right
   accruing to it thereafter.

               1.    Headings.  The headings herein are for convenience only,
   do not constitute a part of this Agreement and shall not be deemed to limit
   or affect any of the provisions hereof.

               1.    Successors and Assigns.  This Agreement shall be binding
   upon and inure to the benefit of the parties and their successors and
   permitted assigns.  Neither the Company nor the Purchaser may assign this
   Agreement or any rights or obligations hereunder without the prior written
   consent of the other, except that the Purchaser may assign its rights
   hereunder and under the Registration Rights Agreement to an Affiliate
   thereof, provided, that such assignee demonstrates to the reasonable
   satisfaction of the Company its satisfaction of the representations and
   warranties set forth in Section 3.2 herein.  The assignment by a party of
   this Agreement or any rights hereunder shall not affect the obligations of
   such party under this Agreement.

               1.    No Third Party Beneficiaries.  This Agreement is intended
   for the benefit of the parties hereto and their respective permitted
   successors and assigns and is not for the benefit of, nor may any provision
   hereof be enforced by, any other person.

               1.    Governing Law.  This Agreement shall be governed by and
   construed and enforced in accordance with the internal laws of the State of
   New York without regard to the principles of conflicts of law thereof.

               1.    Survival.  The representations and warranties of the
   Company and the Purchaser contained in Article III and the agreements and
   covenants of the parties contained in Article IV and this Article VII shall
   survive the Closing (or any earlier termination of this Agreement) and any
   conversion of Shares hereunder.    

               1.  Counterpart Signatures.  This Agreement may be executed in
   two or more counterparts, all of which when taken together shall be
   considered one and the same agreement and shall become effective when
   counterparts have been signed by each party and delivered to the other
   party, it being understood that both parties need not sign the same
   counterpart.  In the event that any signature is delivered by facsimile
   transmission, such signature shall create a valid and binding obligation of
   the party executing (or on whose behalf such signature is executed) the
   same with the same force and effect as if such facsimile signature page
   were an original thereof.

               1.  Publicity.  The Company and the Purchaser shall consult
   with each other in issuing any press releases or otherwise making public

   008258-00007/391115.4

                                      -22-
<PAGE>






   


   statements with respect to the transactions contemplated hereby and neither
   party shall issue any such press release or otherwise make any such public
   statement without the prior written consent of the other, which consent
   shall not be unreasonably withheld or delayed.

               1.     Severability.  In case any one or more of the provisions
   of this Agreement shall be invalid or unenforceable in any respect, the
   validity and enforceability of the remaining terms and provisions of this
   Agreement shall not in any way be affecting or impaired thereby and the
   parties will attempt to agree upon a valid and enforceable provision which
   shall be a reasonable substitute therefor, and upon so agreeing, shall
   incorporate such substitute provision in this Agreement.

               1.  Remedies.  In addition to being entitled to exercise all
   rights provided herein or granted by law, including recovery of damages,
   the Purchaser will be entitled to specific performance of the obligations
   of the Company under this Agreement and the Company will be entitled to
   specific performance of the obligations of the Purchaser hereunder with
   respect to the subsequent transfer of Shares and the Underlying Shares. 
   Each of the Company and the Purchaser agrees that monetary damages would
   not be adequate compensation for any loss incurred by reason of any breach
   of its obligations described in the foregoing sentence and hereby agrees to
   waive in any action for  specific performance of any such obligation the
   defense that a remedy at law would be adequate.
























   008258-00007/391115.4

                                      -23-
<PAGE>


























































   008258-00007/391115.4
    
<PAGE>






   


               IN WITNESS WHEREOF, the parties hereto have caused this
   Agreement to be duly executed as of the date first indicated above.

                                       Company:

                                       NETWORK IMAGING CORPORATION


                                       By:                                    
                                          Name:   
                                          Title:  


                                       Purchaser:


                                       SOUTHBROOK INTERNATIONAL                
        INVESTMENTS, LTD.



                                       By:                                    
                                          Name:   
                                          Title:
























   08258-00007/391114.4

                                       -2-
<PAGE>






   



   Exhibit A





                          CERTIFICATE OF DESIGNATION OF
                     SERIES J CONVERTIBLE PREFERRED STOCK OF
                           NETWORK IMAGING CORPORATION

               The undersigned, James J. Leto and Robert P. Bernardi, hereby
   certify that:

               1     They are the duly elected and acting President and
   Secretary, respectively, of Network Imaging Corporation, a Delaware
   corporation (the "Company").

               1     The Certificate of Incorporation of the Company
   authorizes 20,000,000 shares of preferred stock, par value $.0001 per
   share, of which the following have been authorized and are issued and
   outstanding: Series A Cumulative Convertible Preferred Stock, 1,750,000
   authorized and 1,605,025 outstanding; Series E Convertible Preferred Stock,
   2 authorized and 2 outstanding; Series F-1, F-2, F-3 or F-4 Convertible
   Preferred Stock, 1,792,186 authorized and 1,792,186 of Series F-1
   Convertible Preferred Stock outstanding; Series H Convertible Preferred
   Stock, 270 authorized and 270 outstanding; Series I Convertible Preferred
   Stock, 275 authorized and 275 outstanding.

               1     The following is a true and correct copy of resolutions
   duly adopted by the Board of Directors at a meeting duly held September 25,
   1996, which constituted all requisite action on the part of the Company for
   adoption of such resolutions.

                                   RESOLUTIONS

               WHEREAS, the Board of Directors of the Company (the "Board of
   Directors") is authorized to provide for the issuance of the shares of
   Preferred Stock in series, and by filing a certificate pursuant to the
   applicable law of the State of Delaware, to establish from time to time the
   number of shares to be included in each such series, and to fix the
   designations, powers, preferences and rights of the shares of each such
   series and the qualifications, limitations or restrictions thereof;

               WHEREAS, the Board of Directors desires, pursuant to its
   authority as aforesaid, to designate a new series of preferred stock, set
   the number of shares constituting such series and fix the rights,

   08258-00007/391114.4

                                       -3-
<PAGE>






   


   preferences, privileges and restrictions of such series.

               NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors
   hereby designates a new series of preferred stock and the number of shares
   constituting such series and fixes the rights, preferences, privileges and
   restrictions relating to such series as follows:

               1  Designation, Amount and Par Value.  The series of Preferred
   Stock shall be designated as the Series J Convertible Preferred Stock (the
   "Preferred Stock"), and the number of shares so designated shall be 500. 
   The par value of each share of Preferred Stock shall be $.0001.  Each share
   of Preferred Stock shall have a stated value of $10,000 per share (the
   "Stated Value").

               1  Dividends.

               1     Holders of Preferred Stock shall be entitled to receive,
   when and as declared by the Board of Directors out of funds legally
   available therefor, and the Company shall pay, cumulative dividends at the
   rate per share (as a percentage of the Stated Value per share) equal to 6%
   per annum, payable, in cash or shares of Common Stock, in arrears on the
   Conversion Date (as hereinafter defined).  Dividends on the Preferred Stock
   shall accrue daily commencing the Original Issue Date (as defined in
   Section 6) and shall be deemed to accrue on such date whether or not earned
   or declared and whether or not there are profits, surplus or other funds of
   the Company legally available for the payment of dividends.  The party that
   holds the Preferred Stock on an applicable record date for any dividend
   payment will be entitled to receive such dividend payment and any other
   accrued and unpaid dividends which accrued prior to such dividend payment
   date, without regard to any sale or disposition of such Preferred Stock
   subsequent to the applicable record date but prior to the applicable
   dividend payment date.  Except as otherwise provided herein, if at any time
   the Company pays less than the total amount of dividends then accrued to
   any class of Preferred Stock, such payment shall be distributed ratably
   among the holders of such class based upon the number of shares held by
   each holder.

               1     So long as any Preferred Stock shall remain outstanding,
   neither the Company nor any subsidiary thereof shall redeem, purchase or
   otherwise acquire directly or indirectly any Junior Securities (as defined
   in Section 6), nor shall the Company directly or indirectly pay or declare
   any dividend or make any distribution (other than a dividend or
   distribution described in Section 5) upon, nor shall any distribution be
   made in respect of, any Junior Securities, nor shall any monies be set
   aside for or applied to the purchase or redemption (through a sinking fund
   or otherwise) of any Junior Securities unless all dividends on the
   Preferred Stock for all past dividend periods shall have been paid.

   08258-00007/391114.4

                                       -4-
<PAGE>






   


               1  Voting Rights.  Except as otherwise provided herein and as
   otherwise provided by law, the Preferred Stock shall have no voting rights. 
   However, so long as any shares of Preferred Stock are outstanding, the
   Company shall not, without the affirmative vote of the holders of a
   majority of the shares of the Preferred Stock then outstanding, (i) alter
   or change adversely the powers, preferences or rights given to the
   Preferred Stock or (ii) authorize or create any class of stock ranking as
   to dividends or distribution of assets upon a Liquidation (as defined
   below) senior to, prior to or pari passu with the Preferred Stock.

               1  Liquidation.  Upon any liquidation, dissolution or
   winding-up of the Company, whether voluntary or involuntary (a
   "Liquidation"), the holders of shares of Preferred Stock shall be entitled
   to receive out of the assets of the Company, whether such assets are
   capital or surplus, for each share of Preferred Stock an amount equal to
   the Stated Value, plus an amount equal to accrued but unpaid dividends per
   share, whether declared or not, but without interest, before any
   distribution or payment shall be made to the holders of any Junior
   Securities, and if the assets of the Company shall be insufficient to pay
   in full such amounts, then the entire assets to be distributed shall be
   distributed among the holders of Preferred Stock ratably in accordance with
   the respective amounts that would be payable on such shares if all amounts
   payable thereon were paid in full.  A sale, conveyance or disposition of
   all or substantially all of the assets of the Company or the effectuation
   by the Company of a transaction or series of related transactions in which
   more than 50% of the voting power of the Company is disposed of shall be
   deemed a Liquidation; provided that, a consolidation or merger of the
   Company with or into any other Company or Companies shall not be treated as
   a Liquidation, but instead shall be subject to the provisions of Section 5. 
   The Company shall mail written notice of any such liquidation, not less
   than 60 days prior to the payment date stated therein, to each record
   holder of Preferred Stock.

               1  Conversion.

               1     Each share of Preferred Stock shall be convertible into
   shares of Common Stock at the Conversion Ratio (as defined in Section 6) at
   the option of the holder in whole or in part at any time after the
   expiration of the earlier to occur of (i) 60 days after the Original Issue
   Date and (ii) the date that the Securities and Exchange Commission (the
   "Commission") declares effective under the Securities Act of 1933, as
   amended (the "Securities Act") the registration statement contemplated by
   the Registration Rights Agreement, dated the Original Issue Date (the
   "Registration Rights Agreement"), by and between the Company and the
   original holder of Preferred Stock relating to the Preferred Stock and the
   shares of Common Stock into which the Preferred Stock is convertible in
   accordance with the terms hereof.  Any conversion under this Section 5(a)

   08258-00007/391114.4

                                       -5-
<PAGE>






   


   shall be of a minimum amount of at least ten (10) shares of Preferred
   Stock.  The holder shall effect conversions by surrendering the certificate
   or certificates representing the shares of Preferred Stock to be converted
   to the Company, together with the form of conversion notice attached hereto
   as Exhibit A (the "Holder Conversion Notice") in the manner set forth in
   Section 5(j).  Each Holder Conversion Notice shall specify the number of
   shares of Preferred Stock to be converted and the date on which such
   conversion is to be effected, which date may not be prior to the date the
   holder delivers such Notice by facsimile (the "Holder Conversion Date"). 
   Subject to Section 5(c) and, as to the original holder (or its sole
   designee), subject to Section 4.13 of the Purchase Agreement (as defined in
   Section 6), each Holder Conversion Notice, once given, shall be
   irrevocable.  If the holder is converting less than all shares of Preferred
   Stock represented by the certificate or certificates tendered by the holder
   with the Holder Conversion Notice, the Company shall promptly deliver to
   the holder a certificate for such number of shares as have not been
   converted.

               1     Provided that ten (10) Trading Days (as defined in
   Section 6) shall have elapsed from the date the Commission declared the
   registration statement contemplated by the Registration Rights Agreement
   effective under the Securities Act, each share of the Preferred Stock shall
   be convertible into shares of Common Stock at the Conversion Ratio at the
   option of the Company in whole or in part at any time on or after the
   expiration of one (1) year after the Original Issue Date; provided,
   however, that the Company is not permitted to deliver a Company Conversion
   Notice (as defined below) within ten (10) days of issuing any press release
   or other public statement relating to such conversion.  The Company shall
   effect such conversion by delivering to the holders of such shares of
   Preferred Stock to be converted a written notice in the form attached
   hereto as Exhibit B (the "Company Conversion Notice"), which Company
   Conversion Notice, once given, shall be irrevocable.  Each Company
   Conversion Notice shall specify the number of shares of Preferred Stock to
   be converted and the date on which such conversion is to be effected, which
   date will be at least one (1) Trading Day after the date the Company
   delivers such Notice by facsimile to the holder (the "Company Conversion
   Date").  The Company shall give such Company Conversion Notice in
   accordance with Section 5(j) below at least one (1) Trading Day before the
   Company Conversion Date.  Any such conversion shall be effected on a pro
   rata basis among the holders of Preferred Stock.  Upon the conversion of
   shares of Preferred Stock pursuant to a Company Conversion Notice, the
   holders of the Preferred Stock shall surrender the certificates
   representing such shares at the office of the Company or of any transfer
   agent for the Preferred Stock or Common Stock.  If the Company is
   converting less than all shares of the Preferred Stock, the Company shall,
   upon conversion of such shares subject to such Company Conversion Notice
   and receipt of the certificate or certificates representing such shares of

   08258-00007/391114.4

                                       -6-
<PAGE>






   


   Preferred Stock deliver to the holder or holders a certificate for such
   number of shares of Preferred Stock as have not been converted.  Each of a
   Holder Conversion Notice and a Company Conversion Notice is sometimes
   referred to herein as a "Conversion Notice," and each of a "Holder
   Conversion Date" and a "Company Conversion Date" is sometimes referred to
   herein as a "Conversion Date."

               1     (i)   If the average of the Per Share Market Value (as
   defined in Section 6) for the five (5) Trading Days immediately preceding
   the date that the Company receives any Holder Conversion Notice is less
   than $3 1/8, then the Company shall have the right, exercisable by notice
   to the tendering holder by the close of business on the Business Day
   following the Company's receipt of such Conversion Notice, to redeem the
   Preferred Stock tendered for conversion pursuant to such Holder Conversion
   Notice at a price equal to the product of (i) the average of the Per Share
   Market Value for the five (5) Trading Days immediately preceding the
   Conversion Date, (ii) the number of shares of Preferred Stock which would
   then be converted but for this section, and (iii) the Conversion Ratio,
   which redemption price will be paid by the Company within ten (10) Business
   Days of its receipt of such Holder Conversion Notice.  If the Company fails
   for any reason to pay such redemption price within such period, the Company
   shall effect the conversion of Preferred Shares subject to such Holder
   Conversion Notice at the lesser of the Conversion Price measured on the
   Conversion Date indicated in the Holder Conversion Notice and the
   Conversion Price measured at the end of such ten (10) Business Day period. 
   The holder shall have the right, exercisable at any time when the Per Share
   Market Value is such that the Company would have the right of redemption
   contemplated in this section were it to receive a Holder Conversion Notice,
   to deliver to the Company (by facsimile) a letter inquiring whether the
   Company would exercise such redemption right if it received a Holder
   Conversion Notice within five (5) calendar days of its receipt of such
   letter, which such inquiry letter shall set forth the number of shares that
   would be subject to such Holder Conversion Notice.  The Company shall
   respond to the inquiry letter (by facsimile) by the close of business on
   the Business Day after which it is received, which response shall be
   binding upon it with respect to the Conversion Notice that is subject to
   such inquiry letter.  The Company shall be deemed to have waived its
   redemption right if it fails for any reason to respond by facsimile to the
   holder delivering such inquiry letter by the close of business on the
   Business Day after its receipt of the inquiry letter.

                   (ii)    Not later than three (3) Trading Days after the
   Conversion Date, the Company will deliver to the holder (i) a certificate
   or certificates which shall be free of restrictive legends and trading
   restrictions (other than those then required by law and as set forth in the
   Purchase Agreement, representing the number of shares of Common Stock being
   acquired upon the conversion of shares of Preferred Stock and (ii) one or

   08258-00007/391114.4

                                       -7-
<PAGE>






   


   more certificates representing the number of shares of Preferred Stock not
   converted; provided, however, that the Company shall not be obligated to
   issue certificates evidencing the shares of Common Stock issuable upon
   conversion of any shares of Preferred Stock until certificates evidencing
   such shares of Preferred Stock are either delivered for conversion to the
   Company or any transfer agent for the Preferred Stock or Common Stock, or
   the holder notifies the Company that such certificates have been lost,
   stolen or destroyed and provides a bond (or other adequate security
   reasonably acceptable to the Company) satisfactory to the Company to
   indemnify the Company from any loss incurred by it in connection therewith. 
   The Company shall, upon request of the holder, use its best efforts to
   deliver any certificate or certificates required to be delivered by the
   Company under this Section 5(c) electronically through the Depository Trust
   Corporation or another established clearing corporation performing similar
   functions.  In the case of a conversion pursuant to a Holder Conversion
   Notice, if such certificate or certificates are not delivered by the date
   required under this Section 5(c), the holder shall be entitled by written
   notice to the Company at any time on or before such holder's receipt of
   such certificate or certificates thereafter, to rescind such conversion, in
   which event the Company shall immediately return the certificates
   representing the shares of Preferred Stock tendered for conversion.

               1     (i)   The conversion price for each share of Preferred
   Stock (the "Conversion Price") in effect on any Conversion Date shall be
   the lesser of (a) $3 1/8 and (b) 81% of the average Per Share Market Value
   for the five (5) Trading Days immediately preceding the Conversion Date;
   provided, however, (x) if the registration statement to be filed by the
   Company in accordance with the Registration Rights Agreement is not filed
   with the Commission on or prior to the Filing Date (as defined in the
   Registration Rights Agreement), (y) such registration statement so filed is
   not declared effective by the Commission on or prior to the Effectiveness
   Date (as defined in the Registration Rights Agreement) or (z) such
   registration statement so filed is declared effective but thereafter ceases
   to be effective at any time during the Effectiveness Period (as defined in
   the Registration Rights Agreement) without being succeeded within 30 days
   by a subsequent registration statement filed with and declared effective by
   the Commission (any such failure being hereinafter referred to as an
   "Event", and for purposes of clauses (x) and (y) the date on which such
   Event occurs, or for purposes of clause (z) the date on which such 30-day
   limit is exceeded, being hereinafter referred to as an "Event Date"),
   clause (b) above shall be decreased by 2% monthly (i.e., 79% at the end of
   the first such month and 77% at the end of the second such month). 
   Commencing on the third month after an Event Date, the two (2%) percent
   monthly penalty shall be paid to the holder in cash.

                   (ii)    If the Company, at any time while any shares of
   Preferred Stock are outstanding, (a) shall pay a stock dividend or

   08258-00007/391114.4

                                       -8-
<PAGE>






   


   otherwise make a distribution or distributions on shares of its Junior
   Securities payable in shares of its capital stock (whether payable in
   shares of its Common Stock or of capital stock of any class), (b) subdivide
   outstanding shares of Common Stock into a larger number of shares, (c)
   combine outstanding shares of Common Stock into a smaller number of shares,
   or (d) issue by reclassification of shares of Common Stock any shares of
   capital stock of the Company, the Conversion Price designated in Section
   5(d)(i) shall be multiplied by a fraction of which the numerator shall be
   the number of shares of Common Stock outstanding before such event and of
   which the denominator shall be the number of shares of Common Stock
   outstanding after such event.  Any adjustment made pursuant to this Section
   5(d)(ii) shall become effective immediately after the record date for the
   determination of stockholders entitled to receive such dividend or
   distribution and shall become effective immediately after the effective
   date in the case of a subdivision, combination or re-classification.

                  (iii)    If the Company, at any time while any shares of
   Preferred Stock are outstanding, shall issue rights or warrants to all
   holders of Common Stock entitling them to subscribe for or purchase shares
   of Common Stock at a price per share less than the Per Share Market Value
   of Common Stock at the record date mentioned below, the Conversion Price
   designated in Section 5(d)(i) shall be multiplied by a fraction, of which
   the denominator shall be the number of shares of Common Stock (excluding
   treasury shares, if any) outstanding on the date of issuance of such rights
   or warrants plus the number of additional shares of Common Stock offered
   for subscription or purchase, and of which the numerator shall be the
   number of shares of Common Stock (excluding treasury shares, if any)
   outstanding on the date of issuance of such rights or warrants plus the
   number of shares which the aggregate offering price of the total number of
   shares so offered would purchase at such Per Share Market Value.  Such
   adjustment shall be made whenever such rights or warrants are issued, and
   shall become effective immediately after the record date for the
   determination of stockholders entitled to receive such rights or warrants. 
   However, upon the expiration of any right or warrant to purchase Common
   Stock the issuance of which resulted in an adjustment in the Conversion
   Price designated in Section 5(d)(i) pursuant to this Section 5(d)(iii), if
   any such right or warrant shall expire and shall not have been exercised,
   the Conversion Price designated in Section 5(d)(i) shall immediately upon
   such expiration be recomputed and effective immediately upon such
   expiration be increased to the price which it would have been (but
   reflecting any other adjustments in the Conversion Price made pursuant to
   the provisions of this Section 5 after the issuance of such rights or
   warrants) had the adjustment of the Conversion Price made upon the issuance
   of such rights or warrants been made on the basis of offering for
   subscription or purchase only that number of shares of Common Stock
   actually purchased upon the exercise of such rights or warrants actually
   exercised.

   08258-00007/391114.4

                                       -9-
<PAGE>






   


                   (iv)    If the Company, at any time while shares of
   Preferred Stock are outstanding, shall distribute to all holders of Common
   Stock (and not to holders of Preferred Stock) evidences of its indebtedness
   or assets or rights or warrants to subscribe for or purchase any security
   (excluding those referred to in Section 5(d)(iii) above) then in each such
   case the Conversion Price at which each share of Preferred Stock shall
   thereafter be convertible shall be determined by multiplying the Conversion
   Price in effect immediately prior to the record date fixed for
   determination of stockholders entitled to receive such distribution by a
   fraction of which the denominator shall be the Per Share Market Value of
   Common Stock determined as of the record date mentioned above, and of which
   the numerator shall be such Per Share Market Value of the Common Stock on
   such record date less the then fair market value at such record date of the
   portion of such assets or evidence of indebtedness so distributed
   applicable to one (1) outstanding share of Common Stock as determined by
   the Board of Directors in good faith; provided, however, that in the event
   of a distribution exceeding ten percent (10%) of the net assets of the
   Company, such fair market value shall be determined by a nationally
   recognized or major regional investment banking firm or firm of independent
   certified public accountants of recognized standing (which may be the firm
   that regularly examines the financial statements of the Company) (an
   "Appraiser") selected in good faith by the holders of a majority in
   interest of the shares of Preferred Stock; and provided, further that the
   Company, after receipt of the determination by such Appraiser shall have
   the right to select an additional Appraiser, in which case the fair market
   value shall be equal to the average of the determinations by each such
   Appraiser.  In either case the adjustments shall be described in a
   statement provided to all holders of Preferred Stock of the portion of
   assets or evidences of indebtedness so distributed or such subscription
   rights applicable to one (1) share of Common Stock.  Such adjustment shall
   be made whenever any such distribution is made and shall become effective
   immediately after the record date mentioned above.

                     (v)   All calculations under this Section 5 shall be made
   to the nearest cent or the nearest 1/100th of a share, as the case may be.

                       (vi)                  Whenever the Conversion Price is
   adjusted pursuant to Section 5(d)(ii),(iii), (iv) or (v), the Company shall
   promptly mail to each holder of Preferred Stock, a notice setting forth the
   Conversion Price after such adjustment and setting forth a brief statement
   of the facts requiring such adjustment.

                      (vii)                  In case of any reclassification
   of the Common Stock, any consolidation or merger of the Company with or
   into another Person, the sale or transfer of all or substantially all of
   the assets of the Company or any compulsory share exchange pursuant to
   which the Common Stock is converted into other securities, cash or

   08258-00007/391114.4

                                      -10-
<PAGE>






   


   property, the holders of the Preferred Stock then outstanding shall have
   the right thereafter to convert such shares only into the shares of stock
   and other securities and property receivable upon or deemed to be held by
   holders of Common Stock following such reclassification, consolidation,
   merger, sale, transfer or share exchange, and the holders of the Preferred
   Stock shall be entitled upon such event to receive such amount of
   securities or property as the shares of the Common Stock of the Company
   into which such shares of Preferred Stock could have been converted
   immediately prior to such reclassification, consolidation, merger, sale,
   transfer or share exchange would have been entitled.  The terms of any such
   consolidation, merger, sale, transfer or share exchange shall include such
   terms so as to continue to give to the holder of Preferred Stock the right
   to receive the securities or property set forth in this Section 5(d)(vii)
   upon any conversion following such consolidation, merger, sale, transfer or
   share exchange.  This provision shall similarly apply to successive
   reclassifications, consolidations, mergers, sales, transfers or share
   exchanges.

                     (viii)     If:

                           a.   the Company shall declare a dividend (or any
                                other distribution) on its Common Stock; or

                           b.   the Company shall declare a special
                                nonrecurring cash dividend on or a redemption
                                of its Common Stock; or

                           c.   the Company shall authorize the granting to
                                all holders of the Common Stock rights or
                                warrants to subscribe for or purchase any
                                shares of capital stock of any class or of any
                                rights; or

                           d.   the approval of any stockholders of the
                                Company shall be required in connection with
                                any reclassification of the Common Stock of
                                the Company (other than a subdivision or
                                combination of the outstanding shares of
                                Common Stock), any consolidation or merger to
                                which the Company is a party, any sale or
                                transfer of all or substantially all of the
                                assets of the Company, or any compulsory share
                                exchange whereby the Common Stock is converted
                                into other securities, cash or property; or

                           e.   the Company shall authorize the voluntary or
                                involuntary dissolution, liquidation or

   08258-00007/391114.4

                                      -11-
<PAGE>






   


                                winding-up of the affairs of the Company;

   then the Company shall cause to be filed at each office or agency
   maintained for the purpose of conversion of Preferred Stock, and shall
   cause to be mailed to the holders of Preferred Stock at their last
   addresses as they shall appear upon the stock books of the Company, at
   least 30 calendar days prior to the applicable record or effective date
   hereinafter specified, a notice stating (x) the date on which a record is
   to be taken for the purpose of such dividend, distribution, redemption,
   rights or warrants, or if a record is not to be taken, the date as of which
   the holders of Common Stock of record to be entitled to such dividend,
   distributions, redemption, rights or warrants are to be determined, or (y)
   the date on which such reclassification, consolidation, merger, sale,
   transfer, share exchange, dissolution, liquidation or winding-up is
   expected to become effective, and the date as of which it is expected that
   holders of Common Stock of record shall be entitled to exchange their
   shares of Common Stock for securities or other property deliverable upon
   such reclassification, consolidation, merger, sale, transfer, share
   exchange, dissolution, liquidation or winding-up; provided, however, that
   the failure to mail such notice or any defect therein or in the mailing
   thereof shall not affect the validity of the corporate action required to
   be specified in such notice.

               1     If at any time conditions shall arise by reason of action
   taken by the Company which in the opinion of the Board of Directors are not
   adequately covered by the other provisions hereof and which might
   materially and adversely affect the rights of the holders of Preferred
   Stock (different than or distinguished from the effect generally on rights
   of holders of any class of the Company's capital stock) or if at any time
   any such conditions are expected to arise by reason of any action
   contemplated by the Company, the Company shall mail a written notice
   briefly describing the action contemplated and the material adverse effects
   of such action on the rights of the holders of Preferred Stock at least 30
   calendar days prior to the effective date of such action, and an Appraiser
   selected by the holders of majority in interest of the Preferred Stock
   shall give its opinion as to the adjustment, if any (not inconsistent with
   the standards established in this Section 5), of the Conversion Price
   (including, if necessary, any adjustment as to the securities into which
   shares of Preferred Stock may thereafter be convertible) and any
   distribution which is or would be required to preserve without diluting the
   rights of the holders of shares of Preferred Stock; provided, however, that
   the Company, after receipt of the determination by such Appraiser, shall
   have the right to select an additional Appraiser, in which case the
   adjustment shall be equal to the average of the adjustments recommended by
   each such Appraiser.  The Board of Directors shall make the adjustment
   recommended forthwith upon the receipt of such opinion or opinions or the
   taking of any such action contemplated, as the case may be; provided,

   08258-00007/391114.4

                                      -12-
<PAGE>






   


   however, that no such adjustment of the Conversion Price shall be made
   which in the opinion of the Appraiser(s) giving the aforesaid opinion or
   opinions would result in an increase of the Conversion Price to more than
   the Conversion Price then in effect.

               1     The Company covenants that it will at all times reserve
   and keep available out of its authorized and unissued Common Stock solely
   for the purpose of issuance upon conversion of Preferred Stock as herein
   provided, free from preemptive rights or any other actual contingent
   purchase rights of Persons other than the holders of Preferred Stock, such
   number of shares of Common Stock as shall be issuable (taking into account
   the adjustments and restrictions of Sections 5(b) and Section 5(d) hereof)
   upon the conversion of all outstanding shares of Preferred Stock.  The
   Company covenants that all shares of Common Stock that shall be so issuable
   shall, upon issue, be duly and validly authorized, issued and fully paid
   and nonassessable.

               1     Upon a conversion hereunder, the Company shall not be
   required to issue stock certificates representing fractions of shares of
   Common Stock, but may if otherwise permitted, make a cash payment in
   respect of any final fraction of a share based on the Per Share Market
   Value at such time.  If the Company elects not, or is unable, to make such
   a cash payment, the holder of a share of Preferred Stock shall be entitled
   to receive, in lieu of the final fraction of a share, one whole share of
   Common Stock.

               1     The issuance of certificates for shares of Common Stock
   on conversion of Preferred Stock shall be made without charge to the
   holders thereof for any documentary stamp or similar taxes that may be
   payable in respect of the issue or delivery of such certificate, provided
   that the Company shall not be required to pay any tax that may be payable
   in respect of any transfer involved in the issuance and delivery of any
   such certificate upon conversion in a name other than that of the holder of
   such shares of Preferred Stock so converted and the Company shall not be
   required to issue or deliver such certificates unless or until the Person
   or Persons requesting the issuance thereof shall have paid to the Company
   the amount of such tax or shall have established to the satisfaction of the
   Company that such tax has been paid.

               1     Shares of Preferred Stock converted into Common Stock
   shall be canceled and shall have the status of authorized but unissued
   shares of preferred stock.

               1     Each Holder Conversion Notice shall be given by facsimile
   and by mail, postage prepaid, addressed to the attention of the Chief
   Financial Officer of the Company at the facsimile telephone number and
   address of the principal place of business of the Company.  Each Company

   08258-00007/391114.4

                                      -13-
<PAGE>






   


   Conversion Notice shall be given by facsimile and by mail, postage prepaid,
   addressed to each holder of Preferred Stock at the facsimile telephone
   number and address of such holder appearing on the stock books of the
   Company or provided to the Company by such holder for the purpose of such
   Company Conversion Notice, or if no such facsimile telephone number or
   address appears or is so provided, at the principal place of business of
   the holder.  Any such notice shall be deemed given and effective upon the
   earliest to occur of (i)(a) if such Conversion Notice is delivered via
   facsimile at the facsimile telephone number specified in this Section 5(j)
   prior to 7:30 p.m. (Eastern Standard Time) on any date, such date (or, in
   the case of a Company Conversion Notice, the next Trading Day) or such
   later date as is specified in the Conversion Notice, and (b) if such
   Conversion Notice is delivered via facsimile at the facsimile telephone
   number specified in this Section 5(j) after 7:30 p.m. (Eastern Standard
   Time) on any date, the next date (or, in the case of a Company Conversion
   Notice, the next Trading Day after such next day) or such later date as is
   specified in the Conversion Notice, (ii) five days after deposit in the
   United States mails or (iii) upon actual receipt by the party to whom such
   notice is required to be given.  

               1  Definitions.  For the purposes hereof, the following terms
   shall have the following meanings:

               "Business Day" means any day except Saturday, Sunday and any
   day which shall be a legal holiday or a day on which banking institutions
   in the state of New York are authorized or required by law or other
   government actions to close.

               "Common Stock" means shares now or hereafter authorized of the
   class of Common Stock, par value $.0001, of the Company and stock of any
   other class into which such shares may hereafter have been reclassified or
   changed.

               "Conversion Ratio" means, at any time, a fraction, of which the
   numerator is Stated Value plus accrued but unpaid dividends, and of which
   the denominator is the Conversion Price at such time.

               "Junior Securities" means the Common Stock and all other equity
   securities of the Company, except the Company's Series A Cumulative
   Convertible Preferred Stock, Series E Convertible Preferred Stock, Series
   F-1, F-2, F-3 and F-4 Convertible Preferred Stock, Series H Convertible
   Preferred Stock and Series I Convertible Preferred Stock.

               "Original Issue Date" shall mean the date of the first issuance
   of any shares of the Preferred Stock regardless of the number of transfers
   of any particular shares of Preferred Stock and regardless of the number of
   certificates which may be issued to evidence such Preferred Stock.

   08258-00007/391114.4

                                      -14-
<PAGE>






   


               "Per Share Market Value" means on any particular date (a) the
   closing bid price per share of the Common Stock on such date on The NASDAQ
   National Market or other national securities exchange on which the Common
   Stock has been listed or if there is no such price on such date, then the
   closing bid price on such national securities exchange or market on the
   date nearest preceding such date, or (b) if the Common Stock is not listed
   on The NASDAQ National Market or any national securities exchange or
   market, the closing bid price for a share of Common Stock on the
   over-the-counter market, as reported by the NASDAQ Stock Market at the
   close of business on such date, or (c) if the Common Stock is not quoted on
   the NASDAQ Stock Market, the closing bid price for a share of Common Stock
   on the over-the-counter market as reported by the National Quotation Bureau
   Incorporated (or similar organization or agency succeeding to its functions
   of reporting prices), or (d) if the Common Stock is no longer reported by
   the National Quotation Bureau Incorporated (or similar organization or
   agency succeeding to its functions of reporting prices), then the average
   of the "Pink Sheet" quotes for the relevant conversion period as determined
   by the holder, or (e) if the Common Stock is no longer publicly traded, the
   fair market value of a share of Common Stock as determined by an Appraiser
   (as defined in Section 5(d)(iv) above) selected in good faith by the
   holders of a majority in interest of the shares of the Preferred Stock;
   provided, however, that the Company, after receipt of the determination by
   such Appraiser, shall have the right to select an additional Appraiser, in
   which case, the fair market value shall be equal to the average of the
   determinations by each such Appraiser.

               "Person" means a corporation, an association, a partnership,
   organization, a business, an individual, a government or political
   subdivision thereof or a governmental agency.

               "Purchase Agreement" means the Convertible Preferred Stock
   Purchase Agreement, dated as of the Original Issue Date, between the
   Company and the original holder of the Preferred Stock.

               "Trading Day" means (a) a day on which the Common Stock is
   traded on The NASDAQ National Market or principal national securities
   exchange or market on which the Common Stock has been listed, or (b) if the
   Common Stock is not listed on The NASDAQ National Market or any stock
   exchange or market, a day on which the Common Stock is traded on the
   over-the-counter market, as reported by the NASDAQ Stock Market, or (c) if
   the Common Stock is not quoted on the NASDAQ Stock Market, a day on which
   the Common Stock is quoted in the over-the-counter market as reported by
   the National Quotation Bureau Incorporated (or any similar organization or
   agency succeeding its functions of reporting prices).

               RESOLVED FURTHER, that the President and Secretary of the
   Company be, and they hereby are, authorized and directed to prepare,

   08258-00007/391114.4

                                      -15-
<PAGE>






   


   execute, verify, and file in Delaware, a Certificate of Designation in
   accordance with these resolutions and as required by law.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]












































   08258-00007/391114.4

                                      -16-
<PAGE>






   



               IN WITNESS WHEREOF, Network Imaging Corporation has caused its
   corporate seal to be hereunto affixed and this certificate to be signed by
   James J. Leto, its President, and attested by Robert P. Bernardi, its
   Secretary, this __th day of September, 1996.


                                             NETWORK IMAGING CORPORATION



   By:________________________________
                                                  James J. Leto
                                                  President


   Attest:


   By:___________________________
         Robert P. Bernardi
         Secretary


























   08258-00007/391114.4

                                      -17-
<PAGE>






                                    EXHIBIT A

                              NOTICE OF CONVERSION
                            AT THE ELECTION OF HOLDER

   (To be Executed by the Registered Holder
   in order to Convert shares of Preferred Stock)

   The undersigned hereby irrevocably  elects to convert the  number of shares
   of Series  J Convertible Preferred  Stock indicated below,  into shares  of

   Common Stock,  par value  U.S.$.0001  per share  (the  Common  Stock ),  of
   Network  Imaging Corporation  (the  Company )  according to  the conditions
   hereof, as of  the date written below.   If shares are to be issued  in the
   name  of a  person other  than  undersigned, the  undersigned will  pay all
   transfer taxes payable with respect thereto and is delivering herewith such
   certificates  and  opinions  as reasonably  requested  by  the  Company  in
   accordance therewith.   No  fee  will be  charged  to  the Holder  for  any
   conversion, except for such transfer taxes, if any.

   Conversion calculations:                                                   
                                             Date to Effect Conversion

                                                                              

                                             Number  of  shares  of  Preferred
                                             Stock to be Converted

                                                                              
                                             Applicable Conversion Price


                                                                              
                                             Signature 

                                                                              
                                             Name:


                                                                              
                                             Address:

   The  Company undertakes  to promptly  upon its  receipt of  this conversion
   notice (and,  in any  case prior  to  the time  it  effects the  conversion
   requested hereby), notify the converting holder by facsimile of the  number
   of shares of Common Stock outstanding on such date and the number of shares
   of Common Stock  which would  be issuable to  the holder if the  conversion
   requested in this conversion  notice were effected in  full, whereupon, the
   holder  may, within  one day  of the  notice from  the Company,  revoke the
   conversion requested  hereby to  the extent  that it  determines that  such
   conversion would  result in it owning in excess of  4.9% of the outstanding


   008258-00007/391113.2
    
<PAGE>






   


   shares of Common  Stock on such  date, and the  Company shall issue to  the
   holder  one or  more  certificates representing  shares of  Preferred Stock
   which have not been converted as a result of this provision.  If the holder
   waives  the applicability  of  this  limitation by  notice to  the  Company
   delivered upon its receipt of the Company's notice regarding the  number of
   outstanding shares of Common Stock  or if the Purchaser fails to respond to
   the Company's notice within one day thereafter, the Company shall effect in
   full the conversion requested in this notice.









































   008258-00007/391113.2

                                       -2-
<PAGE>






   


                                    EXHIBIT B

                           NETWORK IMAGING CORPORATION

                             NOTICE OF CONVERSION AT
                           THE ELECTION OF THE COMPANY


   The  undersigned in the name  and on behalf of  Network Imaging Corporation
   (the  "Company") hereby  notifies  the  addressee hereof  that  the Company
   hereby elects to exercise its right to convert 
   [              ] shares of its Series J Convertible Preferred Stock held by
   the Holder into shares of Common Stock, par value U.S.$.0001 per share (the
    Common  Stock ) of the  Company according to the  terms hereof, as  of the
   date  written  below.   No  fee  will  be  charged to  the  Holder for  any
   conversion  hereunder, except for such transfer taxes, if  any which may be
   incurred by the Company if shares are to be issued in the name of a  person
   other than the person to whom this notice is addressed.


   Conversion calculations:                                                   
                                             Date to Effect Conversion

                                                                              
                                             Number  of  Shares  of  Preferred
                                             Stock to be Converted

                                                                              
                                             Applicable Conversion Price

                                                                              
                      
                                             Number of Shares of Common Stock 
   outstanding at close of trading
                                             on Conversion Date


                                            Signature 

                                                                              
                                             Name:

                                                                              
                                             Address:
     





   008258-00007/391113.2

                                       -3-
<PAGE>






   





                                                             Exhibit B 
                                                                     EXHIBIT B

                          REGISTRATION RIGHTS AGREEMENT


               This Registration Rights Agreement (this "Agreement") is made
   and entered into as of September 30, 1996, by and among Network Imaging
   Corporation, a Delaware corporation (the "Company"), and Southbrook
   International Investments, Ltd., a British Virgin Islands corporation (the
   "Purchaser").

               This Agreement is made pursuant to the Convertible Preferred
   Stock Purchase Agreement, dated as of September 30, 1996 by and among the
   Company and the Purchaser (the "Purchase Agreement").  The execution of
   this Agreement is a condition to the closing of the transactions
   contemplated by the Purchase Agreement.

               The parties hereby agree as follows:

         1.    Definitions

               Capitalized terms used and not otherwise defined herein shall
   have the meanings given such terms in the Purchase Agreement.  As used in
   this Agreement, the following terms shall have the following meanings:

               "Advice" shall have meaning set forth in Section 4(o).

               "Affiliate" means, with respect to any Person, any other Person
   that directly or indirectly controls or is controlled by or under common
   control with such Person.  For the purposes of this definition, "control,"
   when used with respect to any Person, means the possession, direct or
   indirect, of the power to direct or cause the direction of the management
   and policies of such Person, whether through the ownership of voting
   securities, by contract or otherwise; and the terms of "affiliated,"
   "controlling" and "controlled" have meanings correlative to the foregoing.

               "Blackout" shall have the meaning set forth in Section 3(b).

               "Business Day" means any day except Saturday, Sunday and any
   day which shall be a legal holiday or a day on which banking institutions
   in the state of New York generally are authorized or required by law or
   other government actions to close.

               "Closing Date" shall have the meaning set forth in the Purchase

   008258-00007/391113.2

                                       -4-
<PAGE>






   


   Agreement.

               "Commission" means the Securities and Exchange Commission.

               "Common Stock" means the Company's Common Stock, par value
   $.0001 per share.

               "Effectiveness Date" means the 90th day following the Closing
   Date.

               "Effectiveness Period" shall have the meaning set forth in
   Section 2(a).

               "Event" shall have the meaning set forth in Section 5.

               "Event Date" shall have the meaning set forth in Section 5.

               "Exchange Act" means the Securities Exchange Act of 1934, as
   amended.

               "Filing Date" means the earlier of (i) 45th day following the
   Closing Date or (ii) the second Business Day after the Company files its
   Quarterly Report on Form 10-Q with the Commission.

               "Holder" or "Holders" means the holder or holders, as the case
   may be, from time to time of Registrable Securities.

               "Indemnified Party" shall have the meaning set forth in Section
   7(c).

               "Indemnifying Party" shall have the meaning set forth in
   Section 7(c).

               "Losses" shall have the meaning set forth in Section 7(a).

               "New York Courts" shall have the meaning set forth in Section
   9(i).

               "Person" means an individual or a corporation, partnership,
   trust, incorporated or unincorporated association, joint venture, limited
   liability company, joint stock company, government (or an agency or
   political subdivision thereof) or other entity of any kind.

               "Proceeding" means an action, claim, suit, investigation or
   proceeding (including, without limitation, an investigation or partial
   proceeding, such as a deposition), whether commenced or threatened.

               "Prospectus" means the prospectus included in the Registration

   008258-00007/391113.2

                                       -5-
<PAGE>






   


   Statement (including, without limitation, a prospectus that includes any
   information previously omitted from a prospectus filed as part of an
   effective registration statement in reliance upon Rule 430A promulgated
   under the Securities Act), as amended or supplemented by any prospectus
   supplement, with respect to the terms of the offering of any portion of the
   Registrable Securities covered by the Registration Statement, and all other
   amendments and supplements to the Prospectus, including post-effective
   amendments, and all material incorporated by reference or deemed to be
   incorporated by reference in such Prospectus.

               "Registrable Securities" means the shares of Series J Preferred
   Stock purchased by the Purchaser pursuant to the Purchase Agreement and the
   shares of Common Stock into which such shares of Series J Preferred Stock
   are convertible pursuant to the Purchase Agreement.

               "Registration Statement" means the registration statement,
   contemplated by Section 2(a), including the Prospectus, amendments and
   supplements to such registration statement or Prospectus, including pre-
   and post-effective amendments, all exhibits thereto, and all material
   incorporated by reference or deemed to be incorporated by reference in such
   registration statement.

               "Rule 144" means Rule 144 promulgated by the Commission
   pursuant to the Securities Act, as such Rule may be amended from time to
   time, or any similar rule or regulation hereafter adopted by the Commission
   having substantially the same effect as such Rule.

               "Rule 144A" means Rule 144A promulgated by the Commission
   pursuant to the Securities Act, as such Rule may be amended from time to
   time, or any similar rule or regulation hereafter adopted by the Commission
   having substantially the same effect as such Rule.

               "Rule 158" means Rule 158 promulgated by the Commission
   pursuant to the Securities Act, as such Rule may be amended from time to
   time, or any similar rule or regulation hereafter adopted by the Commission
   having substantially the same effect as such Rule.

               "Rule 415" means Rule 415 promulgated by the Commission
   pursuant to the Securities Act, as such Rule may be amended from time to
   time, or any similar rule or regulation hereafter adopted by the Commission
   having substantially the same effect as such Rule.

               "Securities Act" means the Securities Act of 1933, as amended.

               "Special Counsel" means any special counsel to the Holders, for
   which the Holders will be reimbursed by the Company pursuant to Section 5.

               "Underwritten registration or underwritten offering" means a

   008258-00007/391113.2

                                       -6-
<PAGE>






   


   registration in connection with which securities of the Company are sold to
   an underwriter for reoffering to the public pursuant to an effective
   registration statement.

         1.    Shelf Registration

               (a)   On or prior to the Filing Date, the Company shall prepare
   and file with the Commission a "shelf" Registration Statement covering all
   Registrable Securities (which Registrable Securities shall include the (i)
   double the number of shares of Common Stock which all shares of Series J
   Preferred Stock are converted into pursuant to the Purchase Agreement on
   the Closing Date or (ii) such other number of shares agreed to by the
   parties to the Purchase Agreement) for an offering to be made on a
   continuous basis pursuant to Rule 415.  The Registration Statement shall be
   on Form S-3 or another appropriate form permitting registration of
   Registrable Securities for resale by the Holders in the manner or manners
   designated by them (including, without limitation, public or private sales
   and one or more underwritten offerings).  The Company shall (x) not permit
   any securities other than the Registrable Securities to be included in the
   Registration Statement and (y) use its best efforts to cause the
   Registration Statement to be declared effective under the Securities Act as
   promptly as practicable after the filing thereof, but in any event prior to
   the Effectiveness Date, and to keep such Registration Statement
   continuously effective under the Securities Act until the date which is
   three years after the Closing Date or such earlier date when all
   Registrable Securities covered by such Registration Statement have been
   sold or may be sold pursuant to Rule 144(A) as determined by the counsel to
   the Company pursuant to a written opinion letter, addressed to the Holders,
   to such effect (the "Effectiveness Period"); provided, however, that the
   Company shall not be deemed to have used its best efforts to keep the
   Registration Statement effective during the Effectiveness Period if it
   voluntarily takes any action that would result in the Holders not being
   able to sell the Registrable Securities covered by such Registration
   Statement during the Effectiveness Period, unless such action is required
   under applicable law or the Company has filed a post-effective amendment to
   the Registration Statement and the Commission has not declared it effective
   or except as otherwise permitted by Section 3(a).

               (a)   If the Holders of a majority of the Registrable
   Securities so elect, an offering of Registrable Securities pursuant to the
   Registration Statement may be effected in the form of an underwritten
   offering.  In such event, and if the managing underwriters advise the
   Company and such Holders in writing that in their opinion the amount of
   Registrable Securities proposed to be sold in such offering exceeds the
   amount of Registrable Securities which can be sold in such offering, there
   shall be included in such underwritten offering the amount of such
   Registrable Securities which in the opinion of such managing underwriters
   can be sold, and such amount shall be allocated pro rata among the Holders

   008258-00007/391113.2

                                       -7-
<PAGE>






   


   proposing to sell Registrable Securities in such underwritten offering.

               (a)   If any of the Registrable Securities are to be sold in an
   underwritten offering, the investment banker or investment bankers and
   manager or managers that will administer the offering will be selected by
   the Holders of a majority of the Registrable Securities included in such
   offering.  No Holder may participate in any underwritten offering hereunder
   unless such Person (i) agrees to sell its Registrable Securities on the
   basis provided in any underwriting agreements approved by the Persons
   entitled hereunder to approve such arrangements and (ii) completes and
   executes all questionnaires, powers of attorney, indemnities, underwriting
   agreements and other documents required under the terms of such
   arrangements.

         1.    Hold-Back Agreements

               (a)   Restrictions on Public Sale by the Holders.  Subject to
   paragraph (b) of this Section 3, the Purchaser hereby understands and
   agrees that the registration rights of the Purchaser pursuant to this
   Agreement and its ability to offer and sell Registrable Securities pursuant
   to the Registration Statement are limited by the provisions of the
   immediately following sentence.  If the Company determines in its good
   faith judgment that the filing of the Registration Statement in accordance
   with Section 2 or the use of any Prospectus would require the disclosure of
   material information which the Company has a bona fide business purpose for
   preserving as confidential or the disclosure of which would impede the
   Company's ability to consummate a significant transaction, upon written
   notice of such determination by the Company, the rights of the Purchaser to
   offer, sell or distribute any Registrable Securities pursuant to the
   Registration Statement or to require the Company to take action with
   respect to the registration or sale of any Registrable Securities pursuant
   to the Registration Statement (including any action contemplated by Section
   4) will for up to 60 days in any 12-month period be suspended until the
   date upon which the Company notifies the Holders in writing that suspension
   of such rights for the grounds set forth in this Section 3(a) is no longer
   necessary; provided that there may be no such further suspension after the
   initial twelve-month period in which such suspension has occurred.

               (a)   Limitation on Blackouts.  Notwithstanding anything
   contained herein to the contrary, the aggregate number of days (whether or
   not consecutive) during which the Company may delay the effectiveness of
   the Registration Statement or prevent offerings, sales or distributions by
   the Purchaser pursuant to paragraph (a) above or the last paragraph of
   Section 4 (collectively, a "Blackout") shall in no event exceed 90 days
   during any 12-month period and no Blackout may continue in consecutive 12
   month periods.



   008258-00007/391113.2

                                       -8-
<PAGE>






   


         1.    Registration Procedures

               In connection with the Company's registration obligations
   hereunder, the Company shall:

               (a)   Prepare and file with the Commission within the time
   period set forth in Section 2 a Registration Statement on Form S-3 in
   accordance with the method or methods of distribution thereof as specified
   by the Holders, and cause the Registration Statement to become effective
   and remain effective as provided herein; provided, however, that not less
   than five (5) Business Days prior to the filing of the Registration
   Statement or any related Prospectus or any amendment or supplement thereto
   (including any document that would be incorporated or deemed to be
   incorporated therein by reference), the Company shall (i) furnish to the
   Holders, their Special Counsel and any managing underwriters, copies of all
   such documents proposed to be filed, which documents (other than those
   incorporated or deemed to be incorporated by reference) will be subject to
   the review of such Holders, their Special Counsel and such managing under-
   writers, and (ii) cause its officers and directors, counsel and independent
   certified public accountants to respond to such inquiries as shall be
   necessary, in the opinion of respective counsel to such Holders and such
   underwriters, to conduct a reasonable investigation within the meaning of
   the Securities Act.  The Company shall not file the Registration Statement
   or any such Prospectus or any amendments or supplements thereto to which
   the Holders of a majority of the Registrable Securities, their Special
   Counsel, or any managing underwriters, shall reasonably object on a timely
   basis.

               (a)   (i)  Prepare and file with the Commission such
   amendments, including post-effective amendments, to the Registration State-
   ment as may be necessary to keep the Registration Statement continuously
   effective for the applicable time period; (ii) cause the related Prospectus
   to be amended or supplemented by any required Prospectus supplement, and as
   so supplemented or amended to be filed pursuant to Rule 424 (or any similar
   provisions then in force) promulgated under the Securities Act; (iii)
   respond as promptly as practicable to any comments received from the
   Commission with respect to the Registration Statement or any amendment
   thereto; and (iv) comply with the provisions of the Securities Act and the
   Exchange Act with respect to the disposition of all Registrable Securities
   covered by the Registration Statement during the applicable period in
   accordance with the intended methods of disposition by the Holders thereof
   set forth in the Registration Statement as so amended or in such Prospectus
   as so supplemented.

               (a)   Notify the Holders of Registrable Securities to be sold,
   their Special Counsel and any managing underwriters immediately (and, in
   the case of (i)(A) below, not less than five (5) days prior to such filing)
   and (if requested by any such Person) confirm such notice in writing no

   008258-00007/391113.2

                                       -9-
<PAGE>






   


   later than one (1) Business Day following the day (i)(A) when a Prospectus
   or any Prospectus supplement or post-effective amendment to the Regis-
   tration Statement is proposed to be filed and, (B) with respect to the
   Registration Statement or any post-effective amendment, when the same has
   become effective; (ii) of any request by the Commission or any other
   Federal or state governmental authority for amendments or supplements to
   the Registration Statement or Prospectus or for additional information;
   (iii) of the issuance by the Commission of any stop order suspending the
   effectiveness of the Registration Statement covering any or all of the
   Registrable Securities or the initiation of any Proceedings for that pur-
   pose; (iv) if at any time any of the representations and warranties of the
   Company contained in any agreement (including any underwriting agreement)
   contemplated hereby ceases to be true and correct in all material respects;
   (v) of the receipt by the Company of any notification with respect to the
   suspension of the qualification or exemption from qualification of any of
   the Registrable Securities for sale in any jurisdiction, or the initiation
   or threatening of any Proceeding for such purpose; and (vi) of the
   occurrence of any event that makes any statement made in the Registration
   Statement or Prospectus or any document incorporated or deemed to be
   incorporated therein by reference untrue in any material respect or that
   requires any revisions to the Registration Statement, Prospectus or other
   documents so that, in the case of the Registration Statement or the
   Prospectus, as the case may be, it will not contain any untrue statement of
   a material fact or omit to state any material fact required to be stated
   therein or necessary to make the statements therein, in light of the
   circumstances under which they were made, not misleading.

               (a)   Use its best efforts to avoid the issuance of, or, if
   issued, obtain the withdrawal of (i) any order suspending the effectiveness
   of the Registration Statement or (ii) any suspension of the qualification
   (or exemption from qualification) of any of the Registrable Securities for
   sale in any jurisdiction, at the earliest practicable moment.

               (a)   If requested by any managing underwriter or the Holders
   of a majority of the Registrable Securities to be sold in connection with
   an underwritten offering, (i) promptly incorporate in a Prospectus
   supplement or post-effective amendment to the Registration Statement such
   information as such managing underwriters and such Holders reasonably agree
   should be included therein and (ii) make all required filings of such
   Prospectus supplement or such post-effective amendment as soon as
   practicable after the Company has received notification of the matters to
   be incorporated in such Prospectus supplement or post-effective amendment;
   provided, however, that the Company shall not be required to take any
   action pursuant to this Section 4(e) that would, in the opinion of counsel
   for the Company, violate applicable law.

               (a)   Furnish to each Holder, their Special Counsel and any
   managing underwriters, without charge, at least one executed copy of each

   008258-00007/391113.2

                                      -10-
<PAGE>






   


   Registration Statement and each amendment thereto, including financial
   statements and schedules, all documents incorporated or deemed to be
   incorporated therein by reference, and all exhibits to the extent requested
   by such Person (including those previously furnished or incorporated by
   reference) promptly after the filing of such documents with the Commission.

               (a)   Promptly deliver to each Holder, their Special Counsel,
   and any underwriters, without charge, as many copies of the Prospectus or
   Prospectuses (including each form of prospectus) and each amendment or
   supplement thereto as such Persons may reasonably request; and the Company
   hereby consents to the use of such Prospectus and each amendment or
   supplement thereto by each of the selling Holders and any underwriters in
   connection with the offering and sale of the Registrable Securities covered
   by such Prospectus and any amendment or supplement thereto.

               (a)   Prior to any public offering of Registrable Securities,
   use its best efforts to register or qualify or cooperate with the selling
   Holders, any underwriters and their respective counsel in connection with
   the registration or qualification (or exemption from such registration or
   qualification) of such Registrable Securities for offer and sale under the
   securities or Blue Sky laws of such jurisdictions within the United States
   as any Holder or underwriter requests in writing, to keep each such reg-
   istration or qualification (or exemption therefrom) effective during the
   Effectiveness Period and to do any and all other acts or things necessary
   or advisable to enable the disposition in such jurisdictions of the
   Registrable Securities covered by a Registration Statement; provided,
   however, that the Company shall not be required to qualify generally to do
   business in any jurisdiction where it is not then so qualified or to take
   any action that would subject it to general service of process in any such
   jurisdiction where it is not then so subject or subject the Company to any
   material tax in any such jurisdiction where it is not then so subject.

               (a)   Cooperate with the Holders and any managing underwriters
   to facilitate the timely preparation and delivery of certificates
   representing Registrable Securities to be sold, which certificates shall be
   free of all restrictive legends, and to enable such Registrable Securities
   to be in such denominations and registered in such names as any such
   managing underwriters or Holders may request at least two Business Days
   prior to any sale of Registrable Securities.

               (a)   Upon the occurrence of any event contemplated by Section
   4(c)(vi), as promptly as practicable, prepare a supplement or amendment,
   including a post-effective amendment, to the Registration Statement or a
   supplement to the related Prospectus or any document incorporated or deemed
   to be incorporated therein by reference, and file any other required
   document so that, as thereafter delivered, neither the Registration
   Statement nor such Prospectus will contain an untrue statement of a
   material fact or omit to state a material fact required to be stated

   008258-00007/391113.2

                                      -11-
<PAGE>






   


   therein or necessary to make the statements therein, in light of the
   circumstances under which they were made, not misleading.

               (a)   Use its best efforts to cause all Registrable Securities
   relating to such Registration Statement to be listed on each securities
   exchange or market, if any, on which similar securities issued by the
   Company are then listed.

               (a)   Enter into such agreements (including an underwriting
   agreement in form, scope and substance as is customary in underwritten
   offerings) and take all such other actions in connection therewith
   (including those reasonably requested by any managing underwriters and the
   Holders of a majority of the Registrable Securities being sold) in order to
   expedite or facilitate the disposition of such Registrable Securities, and
   whether or not an underwriting agreement is entered into, (i) make such
   representations and warranties to such Holders and such underwriters as are
   customarily made by issuers to underwriters in underwritten public
   offerings, and confirm the same if and when requested; (ii) obtain and
   deliver copies thereof to each Holder and the managing underwriters, if
   any, of opinions of counsel to the Company and updates thereof addressed to
   each selling Holder and each such underwriter, in form, scope and substance
   reasonably satisfactory to any such managing underwriters and Special
   Counsel to the selling Holders covering the matters customarily covered in
   opinions requested in underwritten offerings and such other matters as may
   be reasonably requested by such Special Counsel and underwriters; (iii)
   immediately prior to the effectiveness of the Registration Statement, and,
   in the case of an underwritten offering, at the time of delivery of any
   Registrable Securities sold pursuant thereto, obtain and deliver copies to
   the Holders and the managing underwriters, if any, of "cold comfort"
   letters and updates thereof from the independent certified public
   accountants of the Company (and, if necessary, any other independent
   certified public accountants of any subsidiary of the Company or of any
   business acquired by the Company for which financial statements and
   financial data is, or is required to be, included in the Registration
   Statement), addressed to each selling Holder and each of the underwriters,
   if any, in form and substance as are customary in connection with
   underwritten offerings; (iv) if an underwriting agreement is entered into,
   the same shall contain indemnification provisions and procedures no less
   favorable to the selling Holders and the underwriters, if any, than those
   set forth in Section 7 (or such other provisions and procedures acceptable
   to the managing underwriters, if any, and holders of a majority of
   Registrable Securities participating in such underwritten offering; and (v)
   deliver such documents and certificates as may be reasonably requested by
   the Holders of a majority of the Registrable Securities being sold, their
   Special Counsel and any managing underwriters to evidence the continued
   validity of the representations and warranties made pursuant to clause
   4(l)(i) above and to evidence compliance with any customary conditions
   contained in the underwriting agreement or other agreement entered into by

   008258-00007/391113.2

                                      -12-
<PAGE>






   


   the Company.

               (a)   Make available for inspection by the selling Holders, any
   representative of such Holders, any underwriter participating in any
   disposition of Registrable Securities, and any attorney or accountant
   retained by such selling Holders or underwriters, at the offices where
   normally kept, during reasonable business hours, all financial and other
   records, pertinent corporate documents and properties of the Company and
   its subsidiaries, and cause the officers, directors, agents and employees
   of the Company and its subsidiaries to supply all information in each case
   requested by any such Holder, representative, underwriter, attorney or
   accountant in connection with the Registration Statement; provided,
   however, that any information that is determined in good faith by the
   Company in writing to be of a confidential nature at the time of delivery
   of such information shall be kept confidential by such Persons, unless (i)
   disclosure of such information is required by court or administrative order
   or is necessary to respond to inquiries of regulatory authorities; (ii)
   disclosure of such information, in the opinion of counsel to such Person,
   is required by law; (iii) such information becomes generally available to
   the public other than as a result of a disclosure or failure to safeguard
   by such Person; or (iv) such information becomes available to such Person
   from a source other than the Company and such source is not bound by a
   confidentiality agreement.

               (a)   Comply with all applicable rules and regulations of the
   Commission and make generally available to its securityholders earning
   statements satisfying the provisions of Section 11(a) of the Securities Act
   and Rule 158 not later than 45 days after the end of any 12-month period
   (or 90 days after the end of any 12-month period if such period is a fiscal
   year) (i) commencing at the end of any fiscal quarter in which Registrable
   Securities are sold to underwriters in a firm commitment or best efforts
   underwritten offering and (ii) if not sold to underwriters in such an
   offering, commencing on the first day of the first fiscal quarter of the
   Company after the effective date of the Registration Statement, which
   statement shall cover said 12-month period, or end shorter periods as is
   consistent with the requirements of Rule 158.

               (a)   Provide a CUSIP number for all Registrable Securities,
   not later than the effective date of the Registration Statement.

               The Company may require each selling Holder to furnish to the
   Company such information regarding the distribution of such Registrable
   Securities as is required by law to be disclosed in the Registration
   Statement and the Company may exclude from such registration the
   Registrable Securities of any such Holder who unreasonably fails to furnish
   such information within a reasonable time after receiving such request.

               If the Registration Statement refers to any Holder by name or

   008258-00007/391113.2

                                      -13-
<PAGE>






   


   otherwise as the holder of any securities of the Company, then such Holder
   shall have the right to require (i) the inclusion therein of language, in
   form and substance reasonably satisfactory to such Holder, to the effect
   that the ownership by such Holder of such securities is not to be construed
   as a recommendation by such Holder of the investment quality of the
   Company's securities covered thereby and that such ownership does not imply
   that such Holder will assist in meeting any future financial requirements
   of the Company, or (ii) if such reference to such Holder by name or
   otherwise is not required by the Securities Act or any similar Federal
   statute then in force, the deletion of the reference to such Holder in any
   amendment or supplement to the Registration Statement filed or prepared
   subsequent to the time that such reference ceases to be required.

               Each Purchaser covenants and agrees that (i) it will not offer
   or sell any Registrable Securities under the Registration Statement until
   it has received copies of the Prospectus as then amended or supplemented as
   contemplated in Section 4(g) and notice from the Company that such
   Registration Statement and any post-effective amendments thereto have
   become effective as contemplated by Section 4(c) and (ii) the Purchaser and
   its officers, directors or Affiliates, if any, will comply with the
   prospectus delivery requirements of the Securities Act as applicable to
   them in connection with sales of Registrable Securities pursuant to the
   Registration Statement.

               Each Holder agrees by its acquisition of such Registrable
   Securities that, upon receipt of a notice from the Company of the
   occurrence of any event of the kind described in Section 4(c)(ii),
   4(c)(iii), 4(c)(iv), 4(c)(v) or 4(c)(vi), such Holder will forthwith
   discontinue disposition of such Registrable Securities until such Holder's
   receipt of the copies of the supplemented Prospectus and/or amended
   Registration Statement contemplated by Section 4(j), or until it is advised
   in writing (the "Advice") by the Company that the use of the applicable
   Prospectus may be resumed, and, in either case, has received copies of any
   additional or supplemental filings that are incorporated or deemed to be
   incorporated by reference in such Prospectus or Registration Statement.

               1.  Liquidated Damages.  The Company acknowledges and agrees
   that the Holders will suffer damages, and that it would not be feasible to
   ascertain the extent of such damages with precision, if the Company fails
   to fulfill its obligations hereunder and (a) a Registration Statement is
   not filed with the Commission on or prior to the Filing Date, (b) a
   Registration Statement is not declared effective by the Commission on or
   prior to the Effectiveness Date or (c) a Registration Statement is filed
   and declared effective but thereafter ceases to be effective at any time
   during the Effectiveness Period without being succeeded within 30 days by a
   subsequent Registration Statement filed with and declared effective by the
   Commission (any such failure being hereinafter referred to as an "Event",
   and for purposes of clauses (a) and (b) the date on which such Event

   008258-00007/391113.2

                                      -14-
<PAGE>






   


   occurs, or for purposes of clause (c) the date on which such 30-day limit
   is exceeded, being hereinafter referred to as an "Event Date").

               Upon the occurrence of an Event, the Company agrees to increase
   the discount applicable to a conversion of Series J Preferred Stock in
   accordance with Section 5(d)(i) of the Certificate of Designation by two
   percent (2%) per month for each of the first two months after each Event
   Date.  Commencing on the third month after an Event Date, the two percent
   (2%) monthly penalty shall be paid to the Holder in cash.  Such increase in
   discount and/or payment in cash, as the case may be, shall be paid as
   liquidated damages, and not as a penalty, to each Holder; provided, that
   such liquidated damages will, in each case, cease to accrue (subject to the
   occurrence of another Event) on the date in which the applicable
   Registration Statement is no longer subject to an order suspending the
   effectiveness thereof or Proceedings relating thereto or a subsequent Shelf
   Registration is declared effective.

               The Company shall notify each Holder within five days of each
   Event and Event Date.  The Company shall pay the liquidated damage due on
   the Registrable Securities to each Holder of record as at the Event Date on
   the first Business Day of each month in which such liquidated damages shall
   accrue by check delivered to the address for notice of such Holder set
   forth herein.    


























   008258-00007/391113.2

                                      -15-
<PAGE>






   


         1.    Registration Expenses

               (a)   All fees and expenses incident to the performance of or
   compliance with this Agreement by the Company shall be borne by the Company
   whether or not the Registration Statement is filed or becomes effective and
   whether or not any Registrable Securities are sold pursuant to the
   Registration Statement.  The fees and expenses referred to in the foregoing
   sentence shall include, without limitation, (i) all registration and filing
   fees (including, without limitation, fees and expenses (A) with respect to
   filings required to be made with the National Association of Securities
   Dealers, Inc. and (B) in compliance with state securities or Blue Sky laws
   (including, without limitation, fees and disbursements of counsel for the
   underwriters or Holders in connection with Blue Sky qualifications of the
   Registrable Securities and determination of the eligibility of the Regis-
   trable Securities for investment under the laws of such jurisdictions as
   the managing underwriters, if any, or Holders of a majority of Registrable
   Securities may designate)), (ii) printing expenses (including, without
   limitation, expenses of printing certificates for Registrable Securities
   and of printing prospectuses if the printing of prospectuses is requested
   by the managing underwriters, if any, or by the holders of a majority of
   the Registrable Securities included in the Registration Statement), (iii)
   messenger, telephone and delivery expenses, (iv) fees and disbursements of
   counsel for the Company and Special Counsel for the Holders (subject to the
   provisions of Section 6(b)), (v) fees and disbursements of all independent
   certified public accountants referred to in Section 4(1)(iii) (including,
   without limitation, the expenses of any special audit and "cold comfort"
   letters required by or incident to such performance), (vi) Securities Act
   liability insurance, if the Company so desires such insurance, and (vii)
   fees and expenses of all other Persons retained by the Company in
   connection with the consummation of the transactions contemplated by this
   Agreement.  In addition, the Company shall be responsible for all of its
   internal expenses incurred in connection with the consummation of the
   transactions contemplated by this Agreement (including, without limitation,
   all salaries and expenses of its officers and employees performing legal or
   accounting duties), the expense of any annual audit, the fees and expenses
   incurred in connection with the listing of the Registrable Securities on
   any securities exchange on which similar securities issued by the Company
   are then listed.

               (a)   In connection with the Registration Statement, the
   Company shall reimburse the Holders for the reasonable fees and
   disbursements of one firm of attorneys chosen by the Holders of a majority
   of the Registrable Securities.






   008258-00007/391113.2

                                      -16-
<PAGE>






   


         1.    Indemnification

               (a)   Indemnification by the Company.  The Company shall,
   notwithstanding termination of this Agreement and without limitation as to
   time, indemnify and hold harmless each Holder, the officers, directors,
   agents, brokers, investment advisors and employees of each of them, each
   Person who controls any such Holder (within the meaning of Section 15 of
   the Securities Act or Section 20 of the Exchange Act) and the officers,
   directors, agents and employees of each such controlling Person, to the
   fullest extent permitted by applicable law, from and against any and all
   losses, claims, damages, liabilities, costs (including, without limitation,
   costs of preparation and attorneys' fees) and expenses (collectively,
   "Losses"), as incurred, arising out of or relating to any untrue or alleged
   untrue statement of a material fact contained in the Registration
   Statement, any Prospectus or any form of prospectus or in any amendment or
   supplement thereto or in any preliminary prospectus, or arising out of or
   relating to any omission or alleged omission of a material fact required to
   be stated therein or necessary to make the statements therein (in the case
   of any Prospectus or form of prospectus or supplement thereto, in light of
   the circumstances under which they were made) not misleading, except to the
   extent, but only to the extent, that such untrue statements or omissions
   are based solely upon information regarding such Holder furnished in writ-
   ing to the Company by or on behalf of such Holder expressly for use
   therein, which information was reasonably relied on by the Company for use
   therein or to the extent that such information relates to such Holder or
   such Holder's proposed method of distribution of Registrable Securities and
   was reviewed and expressly approved in writing by such Holder expressly for
   use in the Registration Statement, such Prospectus or such form of
   Prospectus or in any amendment or supplement thereto.  The Company shall
   notify the Holders promptly of the institution, threat or assertion of any
   Proceeding of which the Company is aware in connection with the
   transactions contemplated by this Agreement.

               (a)   Indemnification by Holders.  In connection with the
   Registration Statement, each Holder shall furnish to the Company in writing
   such information as the Company reasonably requests for use in connection
   with the Registration Statement or any Prospectus and agrees, jointly and
   not severally, to indemnify and hold harmless the Company, their directors,
   officers, agents and employees, each Person who controls the Company
   (within the meaning of Section 15 of the Securities Act and Section 20 of
   the Exchange Act), and the directors, officers, agents or employees of such
   controlling Persons, to the fullest extent permitted by applicable law,
   from and against all Losses (as determined by a court of competent
   jurisdiction in a final judgment not subject to appeal or review) arising
   solely out of or based solely upon any untrue statement of a material fact
   contained in the Registration Statement, any Prospectus, or any form of
   prospectus, or arising solely out of or based solely upon any omission of a
   material fact required to be stated therein or necessary to make the

   008258-00007/391113.2

                                      -17-
<PAGE>






   


   statements therein not misleading to the extent, but only to the extent,
   that such untrue statement or omission is contained in any information so
   furnished in writing by such Holder to the Company specifically for
   inclusion in the Registration Statement or such Prospectus and that such
   information was reasonably relied upon by the Company for use in the
   Registration Statement, such Prospectus or such form of prospectus or to
   the extent that such information relates to such Holder or such Holder's
   proposed method of distribution of Registrable Securities and was reviewed
   and expressly approved in writing by such Holder expressly for use in the
   Registration Statement, such Prospectus or such form of Prospectus.  In no
   event shall the liability of any selling Holder hereunder be greater in
   amount than the dollar amount of the proceeds received by such Holder upon
   the sale of the Registrable Securities giving rise to such indemnification
   obligation.

               (a)   Conduct of Indemnification Proceedings. If any Proceeding
   shall be brought or asserted against any Person entitled to indemnity
   hereunder (an "Indemnified Party"), such Indemnified Party promptly shall
   notify the Person from whom indemnity is sought (the "Indemnifying Party")
   in writing, and the Indemnifying Party shall assume the defense thereof,
   including the employment of counsel reasonably satisfactory to the
   Indemnified Party and the payment of all fees and expenses incurred in
   connection with defense thereof; provided, that the failure of any
   Indemnified Party to give such notice shall not relieve the Indemnifying
   Party of its obligations or liabilities pursuant to this Agreement, except
   (and only) to the extent that it shall be finally determined by a court of
   competent jurisdiction (which determination is not subject to appeal or
   further review) that such failure shall have proximately and materially
   adversely prejudiced the Indemnifying Party.

               An Indemnified Party shall have the right to employ separate
   counsel in any such Proceeding and to participate in the defense thereof,
   but the fees and expenses of such counsel shall be at the expense of such
   Indemnified Party or Parties unless:  (1) the Indemnifying Party has agreed
   to pay such fees and expenses; or (2) the Indemnifying Party shall have
   failed promptly to assume the defense of such Proceeding and to employ
   counsel reasonably satisfactory to such Indemnified Party in any such
   Proceeding; or (3) the named parties to any such Proceeding (including any
   impleaded parties) include both such Indemnified Party and the Indemnifying
   Party, and such Indemnified Party shall have been advised by counsel that a
   conflict of interest is likely to exist if the same counsel were to
   represent such Indemnified Party and the Indemnifying Party (in which case,
   if such Indemnified Party notifies the Indemnifying Party in writing that
   it elects to employ separate counsel at the expense of the Indemnifying
   Party, the Indemnifying Party shall not have the right to assume the
   defense thereof and such counsel shall be at the expense of the
   Indemnifying Party).  The Indemnifying Party shall not be liable for any
   settlement of any such Proceeding effected without its written consent,

   008258-00007/391113.2

                                      -18-
<PAGE>






   


   which consent shall not be unreasonably withheld.  No Indemnifying Party
   shall, without the prior written consent of the Indemnified Party, effect
   any settlement of any pending Proceeding in respect of which any
   Indemnified Party is a party, unless such settlement includes an
   unconditional release of such Indemnified Party from all liability on
   claims that are the subject matter of such Proceeding.

               All fees and expenses of the Indemnified Party (including
   reasonable fees and expenses to the extent incurred in connection with
   investigating or preparing to defend such Proceeding in a manner not
   inconsistent with this Section) shall be paid to the Indemnified Party, as
   incurred, within 10 Business Days of written notice thereof to the Indem-
   nifying Party (regardless of whether it is ultimately determined that an
   Indemnified Party is not entitled to indemnification hereunder; provided,
   that the Indemnifying Party may require such Indemnified Party to undertake
   to reimburse all such fees and expenses to the extent it is finally
   judicially determined that such Indemnified Party is not entitled to
   indemnification hereunder).

               (a)   Contribution.  If a claim for indemnification under
   Section 7(a) or 7(b) is unavailable to an Indemnified Party or is
   insufficient to hold such Indemnified Party harmless for any Losses in
   respect of which this Section would apply by its terms (other than by
   reason of exceptions provided in this Section), then each Indemnifying
   Party, in lieu of indemnifying such Indemnified Party, shall contribute to
   the amount paid or payable by such Indemnified Party as a result of such
   Losses, in such proportion as is appropriate to reflect the relative fault
   of the Indemnifying Party and Indemnified Party in connection with the
   actions, statements or omissions that resulted in such Losses as well as
   any other relevant equitable considerations.  The relative fault of such
   Indemnifying Party and Indemnified Party shall be determined by reference
   to, among other things, whether any action in question, including any
   untrue or alleged untrue statement of a material fact or omission or
   alleged omission of a material fact, has been taken or made by, or relates
   to information supplied by, such Indemnifying Party or Indemnified Party,
   and the parties' relative intent, knowledge, access to information and
   opportunity to correct or prevent such action, statement or omission.  The
   amount paid or payable by a party as a result of any Losses shall be deemed
   to include, subject to the limitations set forth in Section 7(c), any
   attorneys' or other fees or expenses incurred by such party in connection
   with any Proceeding to the extent such party would have been indemnified
   for such fees or expenses if the indemnification provided for in this
   Section was available to such party.

               The parties hereto agree that it would not be just and
   equitable if contribution pursuant to this Section 7(d) were determined by
   pro rata allocation or by any other method of allocation that does not take
   into account the equitable considerations referred to in the immediately

   008258-00007/391113.2

                                      -19-
<PAGE>






   


   preceding paragraph.  Notwithstanding the provisions of this Section 7(d),
   the Purchaser shall not be required to contribute, in the aggregate, any
   amount in excess of the amount by which the proceeds actually received by
   the Purchaser from the sale of the Registrable Securities subject to the
   Proceeding exceeds the amount of any damages that the Purchaser has
   otherwise been required to pay by reason of such untrue or alleged untrue
   statement or omission or alleged omission.  No Person guilty of fraudulent
   misrepresentation (within the meaning of Section 11(f) of the Securities
   Act) shall be entitled to contribution from any Person who was not guilty
   of such fraudulent misrepresentation.

               The indemnity and contribution agreements contained in this
   Section are in addition to any liability that the Indemnifying Parties may
   have to the Indemnified Parties.

         1.    Rule 144

               The Company shall file the reports required to be filed by it
   under the Securities Act and the Exchange Act in a timely manner and, if at
   any time the Company is not required to file such reports, they will, upon
   the request of any Holder, make publicly available other information so
   long as necessary to permit sales of its securities pursuant to Rule 144. 
   The Company further covenants that it will take such further action as any
   Holder may reasonably request, all to the extent required from time to time
   to enable such Holder to sell Registrable Securities without registration
   under the Securities Act within the limitation of the exemptions provided
   by Rule 144.  Upon the request of any Holder, the Company shall deliver to
   such Holder a written certification of a duly authorized officer as to
   whether it has complied with such requirements.

         1.    Miscellaneous

               (a)   Remedies.  In the event of a breach by the Company or by
   a Holder, of any of their obligations under this Agreement, each Holder or
   the Company, as the case may be, in addition to being entitled to exercise
   all rights granted by law and under this Agreement, including recovery of
   damages, will be entitled to specific performance of its rights under this
   Agreement.  The Company and each Holder agree that monetary damages would
   not provide adequate compensation for any losses incurred by reason of a
   breach by it of any of the provisions of this Agreement and hereby further
   agrees that, in the event of any action for specific performance in respect
   of such breach, it shall waive the defense that a remedy at law would be
   adequate.

               (a)   No Inconsistent Agreements.  Except as specifically set
   forth in Schedule 3.1 to the Purchase Agreement, none of the Company nor
   any of its subsidiaries has, as of the date hereof, nor shall the Company
   or any of its subsidiaries, on or after the date of this Agreement, enter

   008258-00007/391113.2

                                      -20-
<PAGE>






   


   into any agreement with respect to its securities that is inconsistent with
   the rights granted to the Holders in this Agreement or otherwise conflicts
   with the provisions hereof.  Except as set specifically forth in Schedule
   3.1 to the Purchase Agreement, none of the Company nor any of its
   subsidiaries has previously entered into any agreement granting any
   registration rights with respect to any of its securities to any Person. 
   Without limiting the generality of the foregoing, without the written
   consent of the Holders of a majority of the then outstanding Registrable
   Securities, the Company shall not grant to any Person the right to request
   the Company to register any securities of the Company under the Securities
   Act unless the rights so granted are subject in all respects to the prior
   rights in full of the Holders set forth herein, and are not otherwise in
   conflict or inconsistent with the provisions of this Agreement.

               (a)   No Piggyback on Registrations.  Except as specifically
   set forth in Schedule 3.1 to the Purchase Agreement, none of the Company
   nor any of its securityholders (other than the Holders in such capacity
   pursuant hereto) may include securities of the Company in the Registration
   Statement other than the Common Stock to be issued under the Purchase
   Agreement, and the Company shall not enter into any agreement providing any
   such right to any of its securityholders.

               (a)   Entire Agreement; Amendments.  This Agreement, together
   with the Exhibits, Annexes and Schedules hereto, contain the entire
   understanding of the parties with respect to the subject matter hereof and
   supersede all prior agreements and understandings, oral or written, with
   respect to such matters.

               (a)   Amendments and Waivers.  The provisions of this
   Agreement, including the provisions of this sentence, may not be amended,
   modified or supplemented, and waivers or consents to departures from the
   provisions hereof may not be given, unless the same shall be in writing and
   signed by the Company and the Holders of at least a majority of the then
   outstanding Registrable Securities; provided, however, that, for the pur-
   poses of this sentence, Registrable Securities that are owned, directly or
   indirectly, by the Company, or an Affiliate of the Company are not deemed
   outstanding.  Notwithstanding the foregoing, a waiver or consent to depart
   from the provisions hereof with respect to a matter that relates
   exclusively to the rights of Holders and that does not directly or
   indirectly affect the rights of other Holders may be given by Holders of at
   least a majority of the Registrable Securities to which such waiver or
   consent relates; provided, however, that the provisions of this sentence
   may not be amended, modified, or supplemented except in accordance with the
   provisions of the immediately preceding sentence.

               (a)   Notices.  Any notice or other communication required or
   permitted to be given hereunder shall be in writing and shall be deemed to
   have been received (a) upon hand delivery (receipt acknowledged) or

   008258-00007/391113.2

                                      -21-
<PAGE>






   


   delivery by telex (with correct answer back received), telecopy or
   facsimile (with transmission confirmation report) at the address or number
   designated below (if delivered on a business day during normal business
   hours where such notice is to be received), or the first business day
   following such delivery (if delivered other than on a business day during
   normal business hours where such notice is to be received) or (b) on the
   second business day following the date of mailing by express courier
   service, fully prepaid, addressed to such address, or upon actual receipt
   of such mailing, whichever shall first occur.  The addresses for such
   communications shall be:

               If to the Company:            Network Imaging Corporation
                                             500 Huntmar Park Drive
                                             Herndon, VA 22070
                                             Facsimile No.: (703) 478-7523
                                             Attn:  Chief Executive Officer

               With copies to:               Jones & Blouch L.L.P.
                                             1025 Thomas Jefferson Street,
   N.W.
                                             Suite 405
                                             Washington, D.C. 20007
                                             Facsimile No.: (202) 223-4593
                                             Attn:  John W. Blouch

               If to the Purchaser:          Southbrook International
                                             Investments, Ltd.
                                             c/o Trippoak Advisors, Inc.
                                             630 Fifth Avenue, Suite 2000
                                             New York, NY 10111
                                             Facsimile No.: (212) 332-3256
                                             Attn:  Robert L. Miller

               With copies to:               Robinson Silverman Pearce
                                               Aronsohn & Berman LLP
                                             1290 Avenue of the Americas
                                             New York, NY  10019
                                             Attn:  Kenneth L. Henderson and
   Eric L.                                                                     
     Cohen
                                             Facsimile No.:  (212) 541-4630

               If to any other Person who is then the registered Holder:

                                             To the address of such Holder as
                                             it appears in the stock transfer
                                             books of the Company


   008258-00007/391113.2

                                      -22-
<PAGE>






   


   or such other address as may be designated in writing hereafter, in the
   same manner, by such Person.

               (a)   Successors and Assigns.  This Agreement shall inure to
   the benefit of and be binding upon the successors and permitted assigns of
   each of the parties and shall inure to the benefit of each Holder.  The
   Company may not assign its rights or obligations hereunder without the
   prior written consent of each Holder.

               (a)   Counterparts.  This Agreement may be executed in any
   number of counterparts, each of which when so executed shall be deemed to
   be an original and, all of which taken together shall constitute one and
   the same Agreement.  In the event that any signature is delivered by
   facsimile transmission, such signature shall create a valid binding
   obligation of the party executing (or on whose behalf such signature is
   executed) the same with the same force and effect as if such facsimile
   signature were the original thereof.

               (a)   Governing Law; Submission to Jurisdiction; Waiver of Jury
   Trial.  This Agreement shall be governed by and construed in accordance
   with the laws of the State of New York, without regard to principles of
   conflicts of law. The Company hereby irrevocably submits to the
   jurisdiction of any New York state court sitting in the Borough of
   Manhattan in the City of New York or any federal court sitting in the Bor-
   ough of Manhattan in the City of New York (collectively, the "New York
   Courts") in respect of any Proceeding arising out of or relating to this
   Agreement, and irrevocably accepts for itself and in respect of its
   property, generally and unconditionally, jurisdiction of the New York
   Courts.  The Company irrevocably waives to the fullest extent it may
   effectively do so under applicable law any objection that it may now or
   hereafter have to the laying of the venue of any such Proceeding brought in
   any New York Court and any claim that any such Proceeding brought in any
   New York Court has been brought in an inconvenient forum.  Nothing herein
   shall affect the right of any Holder to serve process in any manner
   permitted by law or to commence legal proceedings or otherwise proceed
   against the company in any other jurisdiction.

               (a)   Cumulative Remedies.  The remedies provided herein are
   cumulative and not exclusive of any remedies provided by law.  

               (a)   Severability. If any term, provision, covenant or
   restriction of this Agreement is held by a court of competent jurisdiction
   to be invalid, illegal, void or unenforceable, the remainder of the terms,
   provisions, covenants and restrictions set forth herein shall remain in
   full force and effect and shall in no way be affected, impaired or
   invalidated, and the parties hereto shall use their reasonable efforts to
   find and employ an alternative means to achieve the same or substantially
   the same result as that contemplated by such term, provision, covenant or

   008258-00007/391113.2

                                      -23-
<PAGE>






   


   restriction.  It is hereby stipulated and declared to be the intention of
   the parties that they would have executed the remaining terms, provisions,
   covenants and restrictions without including any of such that may be
   hereafter declared invalid, illegal, void or unenforceable.

               (a)   Headings.  The headings in this Agreement are for
   convenience of reference only and shall not limit or otherwise affect the
   meaning hereof.

               (a)   Shares held by The Company and its Affiliates.  Whenever
   the consent or approval of Holders of a specified percentage of Registrable
   Securities is required hereunder, Registrable Securities held by the
   Company or its Affiliates (other than the Purchaser or transferees or
   successors or assigns thereof if such Persons are deemed to be Affiliates
   solely by reason of their holdings of such Registrable Securities) shall
   not be counted in determining whether such consent or approval was given by
   the Holders of such required percentage.
































   008258-00007/391113.2

                                      -24-
<PAGE>






   



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

                                             NETWORK IMAGING CORPORATION



                                             By:                               
                  
                                                 Name:
                                                 Title:



                                             SOUTHBROOK INTERNATIONAL
                                               INVESTMENTS, LTD.
                                    

                                             By:                               
                                                                               
                                                                     
   Name:
                                              Title:
























   008258-00007/391113.2

                                       -1-
<PAGE>






   


   EXHIBIT C

                           Jones & Blouch L.L.P.
                                       Suite 405-West
                           1025 Thomas Jefferson St., N.W.
                                 Washington, DC  20007
                                       (202) 223-3500



                                       September 30, 1996


   Southbrook International Investment, Limited
   c/o Trippoak Advisor, Inc.
   630 Fifth Avenue
   Suite 2000
   New York, New York 10111

               Re:  Network Imaging Corporation

   Gentlemen:

               We  have acted  as counsel  to Network  Imaging  Corporation, a
   Delaware corporation (the "Company"), in connection with the  execution and
   delivery of the Convertible Preferred Stock Purchase Agreement, dated as of
   September 30, 1996  (the "Purchase Agreement"), by and between  the Company
   and  Southbrook   International  Investment,  Limited  (the   "Purchaser"),
   pursuant to  which the Company  is issuing  to the Purchaser  shares of its
   Series J  Convertible Preferred  Stock,  par value  $.0001 per  share  (the
   "Shares").   Terms used  and not otherwise  defined herein  shall have  the
   respective meanings set forth in the Purchase Agreement.

               This opinion is delivered to you pursuant to Section 5.1(a)  of
   the Purchase Agreement.

               In connection with this opinion, we have examined:

               (a)   An executed copy of the Purchase Agreement;
               (b)   The Certificate  of Designation  of Series  J Convertible
                     Preferred  Stock  of  the  Company,  as  filed  with  the
                     Secretary of the State of Delaware  on September 30, 1996
                     (the "Certificate of Designation");
               (c)   The  Certificate  of  Incorporation  and  By-laws  of the
                     Company, each as amended to date hereof;
               (d)   An  executed copy of  the Registration  Rights Agreement,
                     dated as of  September 30, 1996 (the "Registration Rights

   008258-00007/391113.2

                                       -2-
<PAGE>






                     Agreement"), between the Company and the Purchaser;
               (e)   Records  of  proceedings  and  actions  of  the Board  of
                     Directors  of the  Company relating  to  the transactions
                     contemplated   by   the  Purchase   Agreement   and   the
                     Registration Rights Agreement; 
               (f)   Officer's  Certificate for  the Company,  dated September
                     30, 1996 (the "Officer's Certificate"); and
               (g)   The   Certificate  of   Incorporation   and   By-laws  of
                     Symmetrical  Technologies,  Incorporated  (the  "Domestic
                     Subsidiary"), each as amended to date hereof.


               We  have also  investigated such  questions of  law, including,
   without  limitation, Regulation  D ("Regulation  D") promulgated  under the
   Securities Act  of 1933, as  amended (the "Securities  Act"), and  examined
   such additional corporate  records of the Company and such  other documents
   and public records as we have deemed necessary or appropriate to render the
   opinions contained herein.

               We have assumed the genuineness of all signatures (except those
   of officers of the Company), the authenticity of all documents submitted to
   us as  originals and  the  conformity to  original documents  of  documents
   submitted to  us as  certified, conformed  or photo  copies.  We  have also
   assumed,  without verification,  the legal capacity of  each individual who
   has executed documents  or instruments  in connection with the  transaction
   contemplated  hereby.   With respect  to certain  factual matters,  we have
   relied,  without independent  investigation  on the  facts  stated  in  the
   representations and warranties contained in the Purchase Agreement  and the
   Schedules thereto, the SEC Documents, the Registration Rights Agreement and
   the  Officers' Certificate  (other  than  in each  case  facts constituting
   conclusions of law).

               We have also assumed, without verification (i) that the parties
   to  the  Purchase  Agreement  and  the other  agreements,  instruments  and
   documents executed  in connection therewith,  other than  the Company, have
   the power (including, without limitation, corporate power where applicable)
   and authority  to enter  into and perform  the Purchase  Agreement and such
   other agreements,  instruments and  documents, (ii)  the due authorization,
   execution and delivery by such other parties of the  Purchase Agreement and
   such other  agreements,  instruments and  documents,  and  (iii)  that  the
   Purchase  Agreement and  such other  agreements, instruments  and documents
   constitute legal, valid  and binding obligations of each such  other party,
   enforceable against such  other party  in accordance with their  respective
   terms.

               Based  upon and subject to the foregoing, we are of the opinion
   that:

               1.    Each of  the Company  and the  Domestic  Subsidiary is  a
   corporation, duly incorporated, validly existing and in good standing under
   the laws  of the  jurisdiction  of its  incorporation, with  the  requisite
   corporate power and authority to own and use its  properties and assets and
   to carry on its business as currently conducted.  
<PAGE>






   


               2.    The  Company  has  the  requisite  corporate  power   and
   authority to enter into and to consummate the transactions contemplated  by
   the Purchase Agreement and the Registration Rights Agreement and  otherwise
   to  carry out  its obligations  under such agreements.   The  execution and
   delivery of the Purchase Agreement and the Registration Rights Agreement by
   the Company  and the consummation  by it of  the transactions  contemplated
   thereby  have been duly authorized by  all necessary action on  the part of
   the  Company.  Each of  the Purchase Agreement  and the Registration Rights
   Agreement  has  been  duly  executed  and  delivered  by  the  Company  and
   constitutes the valid  and binding  obligation of  the Company  enforceable
   against  the  Company  in  accordance  with  its  terms,  except  as   such
   enforceability  may  be   limited  by  applicable  bankruptcy,  insolvency,
   reorganization,  moratorium, liquidation  or similar  laws relating  to, or
   affecting generally  the enforcement of, creditors'  rights and remedies or
   by other equitable  principles of general application and except  as rights
   to indemnity or contribution may be limited by applicable law.

               3.   No shares of common stock, par value $.0001 per share (the
   "Common Stock"),  of the  Company  are entitled  to preemptive  or  similar
   rights.  Except as specifically disclosed in Schedules 3.1 to  the Purchase
   Agreement,  to our  knowledge, there are no  outstanding options, warrants,
   scrip  rights  to  subscribe  to,  calls or  commitments  of  any character
   whatsoever relating to, or, except as a result of the  purchase and sale of
   the Shares under the Purchase Agreement,  securities, rights or obligations
   convertible into  or exchangeable for, or  giving any  person any right  to
   subscribe  for  or  acquire any  shares  of  Common  Stock,  or  contracts,
   commitments, understandings,  or arrangements by  which the  Company or any
   Subsidiary is  or may  become bound  to issue  additional shares  of Common
   Stock, or securities  or rights convertible or exchangeable into  shares of
   Common Stock.

               4.   The  Shares are  duly  authorized and,  when paid  for  in
   accordance  with the  terms  of  the Purchase  Agreement, shall  have  been
   validly issued, fully paid and nonassessable.

               5.   The  shares of  Common Stock  into  which the  Shares  are
   convertible  (the  "Underlying  Shares")  have  been  duly  authorized  and
   reserved for  issuance by the  Company and,  when issued by  the Company in
   accordance with the terms of  the Purchase Agreement and the Certificate of
   Designation, will be validly issued, fully paid and nonassessable.

               6.  Assuming the accuracy of the representations and warranties
   of the Company set forth in Section 3.1(k) of the Purchase Agreement and of
   the Purchasers  set forth  in Section  3.2 of  the Purchase Agreement,  the
   offer, issuance  and sale  of the Shares  or the Underlying  Shares to  the
   Purchaser  pursuant  to   the  Purchase  Agreement  are   exempt  from  the
   registration requirements of  the Securities Act by reason of  Regulation D

   008258-00007/391115.4

                                       -4-
<PAGE>






   


   promulgated thereunder.

               7.  The execution,  delivery  and performance  of  the Purchase
   Agreement  and the  Registration Rights  Agreement by  the Company  and the
   consummation  by  the Company  of  the  transactions  contemplated  by such
   agreements do not and  will not (i) conflict with or violate  any provision
   of its  certificate of  incorporation  or bylaws,  (ii) to  our  knowledge,
   conflict with,  or constitute a default  (or an event  which with notice or
   lapse of time or both would become a default) under, or give to others  any
   rights  of termination,  amendment,  acceleration or  cancellation  of, any
   agreement, indenture  or instrument  to which  the Company  is a party,  or
   (iii) to our knowledge, result in a violation of any law, rule, regulation,
   order,  judgment, injunction, decree  or other restriction of  any court or
   governmental authority  to which the Company  is subject (excluding Federal
   and state securities laws and regulations as to which we express no opinion
   except as set forth in  6 above), or by which any  property or asset of the
   Company is bound  or affected, except in  the case of each  of clauses (ii)
   and   (iii),   such   conflicts,   defaults,    terminations,   amendments,
   accelerations, cancellations  and violations as would  not, individually or
   in the  aggregate, have a Material Adverse Effect.    To our knowledge, the
   business  of the  Company is not  being conducted in violation  of any law,
   ordinance  or   regulation  of  any  governmental   authority,  except  for
   violations which, individually or in  the aggregate, do not have a Material
   Adverse Effect..

               8.    Other than the  Required Approvals, to our knowledge, the
   Company is  not required to  obtain any consent,  waiver, authorization  or
   order  of, or  make any  filing or  registration with,  any court  or other
   federal,  state, local or  other governmental authority or  other person in
   connection with the  execution, delivery and performance by the  Company of
   the Purchase  Agreement and  the Registration  Rights Agreement, where  the
   failure to obtain  such consent, waiver authorization or order, or  to give
   or make such notice or filing, would materially impair or delay the ability
   of  the Company  to effect  the closing  and deliver  to the  Purchaser the
   shares free  and clear of all  liens, except that we  express no opinion on
   Federal  and state securities laws and regulations except as set forth in 6
   above.

               9.    To  our  knowledge, the  Company  has  filed  all reports
   required to  be filed by it  under the Securities Exchange  Act of 1934, as
   amended (the "Exchange Act"), including pursuant to Section 13(a) or  15(d)
   thereof,  for  the two  years preceding  the date  hereof (or  such shorter
   period as the  Company was  required by  law to  file such  material) on  a
   timely basis, or has received a valid extension of such time of filing.   

               We do not undertake to advise you or anyone else of any changes
   in the opinions expressed herein resulting from changes in  law, changes in

   008258-00007/391115.4

                                       -5-
<PAGE>






   


   facts or any other matters  that hereafter might occur or be brought to our
   attention  that did not  exist on  the date hereof and  of which  we had no
   knowledge.

               We express no opinion  as to the law of any jurisdiction  other
   than the  federal law of  the United  States, the  laws of the District  of
   Columbia and, to the extent relevant  to the opinions expressed herein, the
   General Corporation  Law of  the State  of Delaware  (the "DGCL").   To the
   extent the laws of any state other than the DGCL govern any of the opinions
   expressed herein, we have assumed that the laws of such  state are the same
   as the laws of the District of Columbia.

                                       Very truly yours,



                                       /s/ Jones & Blouch L.L.P.
                                       Jones & Blouch L.L.P.






























   008258-00007/391115.4

                                       -6-
<PAGE>






   


                                                             Exhibit D 

                                 Conversion Procedures

         Conversion shall  be effectuated by surrendering  the Preferred Stock
   to  be  converted by  overnight  courier to  the Company  with a  Notice of
   Conversion, a  copy of which is  attached hereto (with  an advance  copy of
   such conversion notice to the Company and its counsel by facsimile at (703)
   904-3292  and  (202)   223-4593,  respectively),  executed  by  the  holder
   evidencing such  holder's intention  to  convert the  number of  shares  of
   Preferred  Stock subject to such  notice, and accompanied, in the event the
   holder desires to register the shares of  Common Stock in a name other than
   that of holder, by proper assignment hereof.   The Company shall cause  its
   transfer agent (the "Transfer Agent") to deliver the shares of Common Stock
   subject to such notice  (free of restrictive legend  except as provided  in
   the Convertible Preferred Stock Purchase Agreement between the  Company and
   the original  holder of  the Preferred  Stock) to  the holder  within three
   business days  from  date of  receipt  of  the conversion  notice  and  the
   original  of  the  Preferred  Stock  certificate  (or  a  lost  certificate
   affidavit and bond  in form reasonably satisfactory  to the Company  if the
   original certificate has been lost, mutilated or destroyed).  If the holder
   is converting less  than all shares of  Preferred Stock represented by  the
   certificate or certificates tendered by the holder with the above mentioned
   conversion notice,  the Company  shall  promptly deliver  to the  holder  a
   certificate for such number of shares of  Preferred Stock as have not  been
   converted.






















   008258-00007/391115.4

                                       -7-
<PAGE>






   


                  NETWORK IMAGING CORPORATION - NOTICE OF CONVERSION

   The  undersigned Registered Holder  hereby elects to convert  the number of
   shares of Series J Convertible Preferred Stock set forth below into  shares
   of  common  stock ("Common  Stock")  of  Network  Imaging  Corporation (the
   "Company") according to the conditions of the Certificate of Designation of
   Series J Convertible Preferred Stock.  The election of the holder hereunder
   shall  be irrevocable, except  to the extent that  the conversion requested
   pursuant to this notice  would result in the Purchaser owning in  excess of
   4.9%  of  the   outstanding  shares  of  the   Company's  Common  Stock(the
   "Outstanding  Shares"),   as  determined   on  the   Conversion  Date  (the
   "Conversion Cap").   If the holder submitting  this notice is the Purchaser
   or a nominee of the Purchaser, the Company will promptly (and, in  any case
   prior  to  the  time it  effects  such  conversion) notify  the  holder  by
   facsimile  of the  number of  Outstanding Shares.   If the  holder promptly
   provides the Company by facsimile with a notice stating that the conversion
   would  result in  the Purchaser  exceeding the  Conversion Cap  and setting
   forth  the maximum  number of  shares of  Common Stock  that may  be issued
   without the  Purchaser exceeding  the  Conversion  Cap, the  Company  shall
   effect the  conversion of  only such number  of shares  of Preferred  Stock
   tendered pursuant  hereto  as would  not  result in  the ownership  by  the
   Purchaser of in excess of 4.9% of such Common Stock, and shall issue to the
   Purchaser one  or more certificates representing  shares of Preferred Stock
   which  have not  been converted  as a  result of  the Conversion Cap.   The
   Purchaser may  waive the applicability of  the Conversion Cap  by notice to
   the Company  delivered  upon its  receipt of  the Company's  notice of  the
   number of  Outstanding Shares.  If shares are to be issued in the name of a
   person  other than the  undersigned, the undersigned will  pay all transfer
   taxes  payable  with  respect  thereto  and  is  delivering  herewith  such
   certificates and opinions as have been reasonably requested by the Company.
   No fee  will  be charged  to the  Holder  for any  conversion,  except  for
   transfer taxes, if any.

   Applicable Conversion Price               $        
   ($3.125 or, if lower, 81% of                    Day 1             
   the average closing bid price                   Day 2             
   for the Common Stock for the              Day 3             
   five trading days preceding                     Day 4             
   the date for conversion                         Day 5             
   specified in this Notice)                       Average            X 81%=   








   008258-00007/391115.4

                                       -8-
<PAGE>






   



   Preferred Stock to Be Converted

   Certificate   No. of Shares                 Conversion Value       No. of
   Shares 
   __No.___      Preferred Stock              Preferred Stock*           
   Common Stock * 
                                                    




   Totals                                                                      
                                                           

 * Conversion Value = $10,000.  No. of Shares Common Stock = 
 Conversion Value/Applicable Conversion Price.


   Execution

                                                                               
     
   Date of this Notice                                    Name of Registered
   Holder

                        ________      
   Date to Effect Conversion  

   Contact Name:    ______________________         ___________________         
                                                                              
   Authorized Signature
   Telephone:    ______________________              
      
   Facsimile:     _______________________                _____________________ 
                          

                                             _________________________________
                                                         Address
   NOTE:  No shares of Common Stock will be issued until the original Preferred
    Stock Certificate(s) to be converted and the Notice of Conversion are 
    received by the Company or its authorized agent.  The original
    Preferred Stock Certificate(s) to be converted and the Notice 
    of Conversion must be received by the Company or its authorized 
    agent by the fifth business day following the Date of Conversion, or
    such Notice of Conversion shall become null and void.  The Date to
    Effect Conversion must be on or after the Date of this Notice.

      This Notice must be sent by facsimile and by overnight courier to
      John W. Blouch, Jones & Blouch  L.L.P., Suite 405 West, 1025 Thomas
      Jefferson Street, N.W., Washington, D.C. 20007 (Fax No. 202-223-4593)

    008258-00007/391115.4

                                       -9-
<PAGE>






   


   and by facsimile to Jorge R. Forgues, Network Imaging Corporation, 500
   Huntmar Park Drive, Herndon, VA
   20170-5100 (Fax No. 703-904-3292). 














































   008258-00007/391115.4

                                      -10-
<PAGE>






   






                             Form of Transfer Agent Letter




                                                         _____________         
     , 1996



   American Stock Transfer & Trust Company
   40 Wall Street
   New York, New York  10005

   Attention:  Herb Lemmer
                     Paula Magno


   Re:  Network Imaging Corporation


   Ladies & Gentlemen:

         Network Imaging Corporation (the "Company") has issued 500 shares of
   Series J Convertible Preferred Stock (the "Preferred Stock") which are
   convertible into shares of the Company's common stock, par value $.0001 per
   share (the "Common Stock"), pursuant to the terms set forth in the
   Certificate of Designation for the Preferred Stock, a copy of which is
   attached.  The shares of Preferred Stock were issued in September 1996 in
   reliance on Regulation D under the Securities Act of 1933.  The Company has
   received a notice to convert shares of Preferred Stock which the Company
   has determined requires the issuance of         shares (the "Shares") of
   Common Stock.

         The Shares are being issued pursuant to resolutions adopted by the
   Board of Directors of the Company dated September 25, 1996, a copy of which
   is attached.  In our opinion, the shares have been duly authorized and,
   upon issuance as provided for in the Certificate of Designation, will be
   validly issued, fully paid and non-assessable.

         You are hereby authorized and directed, as registrar and transfer
   agent of the Common Stock, to issue certificates for       shares of Common
   Stock registered as follows:

   008258-00007/391115.4

                                      -11-
<PAGE>






   


         The following legend should be placed on the Certificate:

               THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES
               AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY
               STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
               REGULATION D PROMULGATED UNDER THE U.S. SECURITIES ACT OF 1933,
               AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, THEY MAY
               NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR
               THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN
               THE FOLLOWING SENTENCE.  BY ITS ACCEPTANCE HEREOF, THE HOLDER
               OF THESE SECURITIES AGREES THAT IT WILL NOT RESELL, PLEDGE OR
               OTHERWISE TRANSFER THESE SECURITIES, EXCEPT (A) PURSUANT TO AN
               EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (B)
               TO NETWORK IMAGING CORPORATION (THE "COMPANY") OR (C) PURSUANT
               TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE
               SECURITIES ACT.  IF THE PROPOSED TRANSFER IS TO BE MADE OTHER
               THAN PURSUANT TO CLAUSE (A) OR (B) ABOVE, THE HOLDER MUST,
               PRIOR TO SUCH TRANSFER, FURNISH TO THE COMPANY AND THE TRANSFER
               AGENT SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION
               AS THEY MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS
               BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION
               NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
               ACT.  AS USED HEREIN, THE TERMS "UNITED STATES" AND "U.S.
               PERSON" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 PROMULGATED
               UNDER THE SECURITIES ACT. 

         Please fax a copy of the front and back of the certificate to my
   attention and hold the certificate for our authorization to deliver the
   certificate pursuant to instructions that will be subsequently furnished to
   you. 

         Thank you for your assistance in this matter.

                                               Very truly yours,



                                               










   008258-00007/391115.4

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