EBT INTERNATIONAL INC
SEPARATION AGREEMENT
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>0002.txt
<DESCRIPTION>SEPARATION AGREEMENT
<TEXT>

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                                                                    Exhibit 10.1

                       Separation Agreement and Release

This Separation Agreement and Release entered into as of the 26th day of May,
2000, is made by and between Inso Corporation ("the Company") and Robert F.
Dudley ("the Executive"), and constitutes the parties' agreement with respect to
the termination of the Executive's employment.

1.   The Executive voluntarily resigns as an officer of the Company and all of
     the Company's subsidiaries effective May 26, 2000 ("the Resignation Date")
     and as an employee with the Company (apart from holding an office as
     aforesaid) on November 26, 2001 ("the Termination Date"). Executive shall
     execute and return to the Company the resignation letter attached hereto as
     Exhibit A.

2.   (a) During the period between the Resignation Date and the Termination Date
     ("the Interim Period"), Executive or his estate shall continue to be paid
     his base salary as in effect on the Resignation Date (reduced by any
     amounts received under any disability insurance program, or other income
     replacement program available through the Company) in accordance with the
     Company's normal and customary pay practices for executive employees,
     subject to all applicable federal and state income, payroll, and other
     applicable tax withholding. During the Interim Period, the Executive shall
     perform any special assignments reasonably requested by the Chief Executive
     Officer or the Board of Directors of the Company at reasonable times and
     places mutually agreeable to the parties. It is the intention of the
     parties that such special assignments would not unreasonably interfere with
     any future employment the Executive may undertake with an employer other
     than the Company. Additionally, the Executive shall be reimbursed for
     reasonable expenses, as determined by the Company related to the services
     requested by the Chief Executive Officer or the Board of Directors during
     the Interim Period.

     (b) At Executive's option, Executive may elect in writing to receive the
     salary continuation set forth in Paragraph 2(a) above in an accelerated
     lump sum payment, provided that such lump sum payment shall be discounted
     to its present value, at a discount rate to be determined by the Company's
     investment bankers. However, if the election is made six months or less
     prior to the Termination Date, then the discount rate shall be deemed to be
     the six (6) month US Treasury bill rate on the election date plus one
     hundred and fifty (150) basis points. In the event Executive elects this
     lump sum payment option, Executive's Termination Date shall be the date of
     such election for purposes of this Agreement (including without limitation
     Paragraphs 3, 4, 6 and Attachment A to this Agreement).
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3.   During the Interim Period and subject to the exceptions noted below,
     Executive and his family shall be entitled to continue his or their
     participation in the Company's medical, dental, and vision care benefit
     plans to the same extent, and under the same conditions, that he may be a
     participant in such plans on the Resignation Date regardless of the
     intervening death of Executive; provided however, such participation shall
     cease on the

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     earlier of: (a) the Termination Date, and (b) the last day of the month in
     which he may be covered by any plan, program or arrangement, sponsored by
     another employer offering similar coverage.

4.   On the Termination Date, Executive shall be eligible to continue medical,
     dental, and vision care benefits under the provisions of COBRA, and he will
     be notified of his COBRA rights at that time.

5.   Executive's participation in Company benefit plans, programs, and
     arrangements not enumerated in paragraph 3 above shall be as described in
     Attachment A: "Executive Separation Agreement, Summary of Benefits
     Continuation". Executive's entitlement to and eligibility for further
     vacation, sick leave and other paid time off shall cease on the Resignation
     Date. The Executive shall be entitled to earned but unused vacation, which
     shall be paid to him within 15 days of the execution of this Agreement.

6.   Previously granted, but unexercised stock options held by Executive for the
     purchase of stock of the Company shall be exercisable pursuant to the terms
     of the Company's stock option plans, for a period of 90 days after the
     Termination Date or 180 days following the death of Executive, as the case
     may be. All previously granted, but unexercised stock options and
     restricted shares held by the Executive will continue to vest over the
     Interim Period and will become fully vested upon a change in control of the
     Company as outlined in the Company's stock option plans.

7.   Executive shall be entitled to an incentive compensation payment of
     $18,000. This will be paid within 15 days of the execution of this
     Agreement.

8.   Anything contained in paragraphs 14 and 15 notwithstanding, the Company and
     Executive shall continue to be bound by the Non-Disclosure Agreement
     executed by Executive on August 2, 1999, which Agreement is incorporated
     herein by reference.

9.   The Company has offered, upon request of the Executive, to pay up to
     $10,000 for and retain a firm to provide Executive Outplacement Assistance,
     or, at the Executive's election, and in lieu of the Executive Outplacement
     Assistance, to provide a $10,000 cash payment directly to the Executive.
     The Executive shall inform the Company in writing of his preference.

10.  During the Interim Period, the Executive will not attempt to hire or hire,
     or attempt to solicit or solicit, any employee of the Company, or assist in
     such hiring by anyone else, to work as an employee or independent
     contractor, with, or otherwise provide services to, any business directly
     competitive with the Company's business. Notwithstanding the foregoing, the
     Executive will not be considered to be in violation of this Agreement if he
     complies with a request to provide a written or oral reference for someone
     seeking employment where this conduct would otherwise be considered to
     violate the provisions of this paragraph.

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11.  From and after the date of this Agreement, the Executive shall continue to
     be entitled to indemnification as an "Officer" of the Company in accordance
     with Article V of the Company's By-laws as in effect as of the date of this
     Agreement notwithstanding any subsequent amendment to such By-laws. The
     term "Officer" shall have the meaning set forth in Article V of the
     Company's By-laws.

12.  Executive agrees to return to the Company prior to the Resignation Date,
     all Company property including, but not limited to, vendor, supplier, and
     any other business or mailing lists, reports, files, memoranda, records and
     software, credit cards, desk or file keys, computer access codes or disks,
     and Company manuals. Executive further agrees that he will not retain any
     copies, duplicates, reproductions or excerpts of such property.
     Notwithstanding the preceding, Executive shall not be required to return to
     the Company the laptop computer and peripherals purchased by the Company
     for his use.

13.  Executive acknowledges that the Company will include a copy of this
     Agreement as an exhibit to its Form 10-Q for the fiscal quarter ending July
     31, 2000. Until such time as the Company includes a copy of this Agreement
     as an exhibit to its Form 10-Q, the Executive and Company represent and
     agree that they and their agents and representatives shall keep completely
     and strictly confidential the terms of this Agreement, except as required
     by law. Even after a copy of this Agreement is included as an exhibit to
     the Company's Form 10-Q, the parties agree to keep completely and strictly
     confidential any settlement negotiations that occurred in connection with
     this Agreement.

14.  Executive for himself and on behalf of his heirs, executors, administrators
     and assigns, hereby remises, releases and fully discharges the Company and,
     to the extent applicable, its present, former, and future parent companies,
     subsidiaries and affiliates, and the officers, directors, employees,
     agents, successors and assigns of each of them ("the Released Parties") of
     and from any and all claims, rights and causes of action of all nature
     known, unknown, past, present, now foreseeable or unforeseeable, which he
     has or may hereafter have, in any way arising out of, connected with or
     related to Executive's employment with any of the Released Parties, the
     termination thereof or based upon information made known to Executive
     during employment with any of the Released Parties. This Release shall
     include, but not be limited to, any claims, damages, rights and causes of
     action for wrongful discharge, breach of contract, discrimination or
     retaliation under any federal, state or local laws, rules, orders or
     regulations including Title VII the Civil Rights Act of 1964, 42
     U.S.C.(S)2000 et seq., the Age Disrimination in employment Act, 29
                   ------
     U.S.C.(S)621 et seq., the Family and Medial Leave Act, 29 U.S.C.(S)2601
                  ------
     et seq., the Employee retirement Income Security Act, 29 U.S.C.(S) et seq.,
     ------                                                             ------
     the Massachusetts Civil Rights Act, M.G.L.c. 12 (S)11H and 11I, the
     Massachusetts Fair Employment Practices Act, M.G.L.c. 151b,(S)1 et. seq.,
     the Americans with Disabilities Act, 29 U.S.C.(S)12101 et. seq., and the
                                                            -------
     Massachusetts Equal Rights Act, c.93,(S)102. This Release shall also
     include, but not be limited to, all claims, rights and causes of action for
     costs, attorney's fees, bounties, or percentage of awards or settlements
     which Executive

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     may assert against or which may be asserted against the Company by others
     on Executive's behalf, or against any of the Released Parties. Executive
     and the Company intend and agree that this Release is to be a broad Release
     to apply to any relief or cause of action, no matter what it is called, and
     shall include, but not be limited to, claims, rights or causes of action
     for wages, benefits, bonuses, fines, back pay, share of awards,
     compensatory damages, and punitive damages; however, nothing in this
     Release shall be construed to bar claims for alleged breaches of this
     Agreement.

15.  The Company, on its behalf, and to the extent applicable, on behalf of its
     present, former and future parent companies, subsidiaries and affiliates,
     and officers, directors, agents, successors and assigns of each of them
     hereby remises, releases, and fully discharges Executive of and from all
     claims, demands, causes of action, damages and expenses, of any and every
     nature whatsoever, known or unknown by the Company, past or present as a
     result of actions, omissions or events occurring through the date of this
     Agreement in connection with his employment with the Company; however,
     nothing in this Release shall be construed to bar claims for alleged
     breaches of this Agreement.

16.  Executive will not disparage or discuss the Company or its agents,
     officers, servants or employees in a derogatory manner. Executive will at
     all times state, if asked, that the Company was and is a reputable company
     during his employment with the Company and that he was proud to have been
     associated with it. The Company's senior executives (to include the
     President and his direct reports) will not disparage or discuss the
     Executive in a derogatory manner and will at all times state if asked, that
     the Executive conducted himself honorably and with distinction and is a
     reputable person.

17.  The Executive herein represents that he has not filed any complaints,
     charges or claims for release against the Released Parties with any local,
     state, or federal court or administrative agency which currently are
     outstanding.

18.  The payment by the Company of the consideration referred to herein is not,
     and shall not be deemed, an admission of responsibility or liability by any
     of the Released Parties.

19.  The Employee acknowledges that he has been given twenty-one (21) days to
     consider this Agreement and has been advised to consult with an attorney
     before signing.

20.  This Agreement shall become effective on the eighth (8th) day following the
     date on which it is signed by the Employee. The Employee may revoke this
     Agreement in the seven-day period following the date on which the Employee
     signs the Agreement by submitting a written revocation to the Company. Any
     payments due under this Agreement shall not be paid until the Effective
     Date of this Agreement, except as otherwise agreed.

21.  Employee acknowledges that:

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          .  He was advised to consult with an attorney to review this Agreement
             prior to signing it, and was given a chance to refuse to sign this
             Agreement.
          .  He has read and understands this Agreement and understands fully
             its final and binding effect.
          .  None of the Released Parties had made any statements, promises or
             representations not set forth in this Agreement, and Executive has
             not relied on any such statements, promises or representations.
          .  He has voluntarily signed this Agreement with the knowledge and
             understanding and full intention of releasing the Released Parties
             as set forth above.

22.  This Agreement is binding upon and shall inure to the benefits of the
     parties hereto and their respective assigns, successors, heirs and personal
     representatives; provided however that the Executive may not assign any
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     rights or duties it may have hereunder without prior written consent of the
     Company.

23.  If any provision of this Agreement is judicially determined to be invalid
     or unenforceable as written, then such provision shall, if possible, be
     modified and reformed to the degree necessary to render it valid and
     enforceable. Any such invalidity or unenforceability of any provision shall
     have no effect on the remainder of this Agreement which shall remain in
     full force and effect.

24.  This Agreement is to be governed and will be construed under and in
     accordance with the laws of the Commonwealth of Massachusetts.

25.  This Agreement, together with the document incorporated herein by
     reference, constitutes the entire agreement between the parties hereto and
     supersedes all prior and contemporaneous negotiations, representations,
     understandings and agreements, whether written or oral. Without limitation,
     the parties acknowledge and agree that each of the Management Retention
     Agreement by and between Inso and the Executive, and the Restricted Stock
     Award Agreement dated February 15, 2000 by and between Inso and the
     Executive, is terminated and is of no further force and effect.

IN WITNESS WHEREOF, the Company and Executive have entered into this Agreement
on the date first above written.

Inso Corporation                           The Executive


By: /s/ Jonathan Levitt                    /s/ Robert F. Dudley
   -------------------------              ---------------------
     Jonathan Levitt                        Robert F. Dudley
     Vice President, General Counsel

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Entered into as of the 26/th/ day of May, 2000


Inso Corporation
31 St. James Avenue
Boston, MA 02116-4101


Attention:       Stephen O. Jaeger
                 Chairman of the Board of Directors of Inso Corporation

Dear Steve:

Effective May 26, 2000, I hereby resign my position as Vice President, Chief
Financial Officer and Treasurer of Inso Corporation, and resign from any
position I hold as an officer or director of any subsidiaries and affiliates of
Inso Corporation, pursuant to the Separation Agreement and Release entered into
as of the 26th day of May, 2000.

Sincerely,



/s/ Robert F. Dudley
--------------------
Robert F. Dudley

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