EXECUTION
      COPY

     

     

     

      
        

      

    

    


    Asset
      Purchase Agreement

    


    Dated
      as of July 31, 2006

    


    By
      and Between

    


    QS
      Technologies, Inc. and

    


    Intelligent
      Systems Corporation, as Sellers

    


    and

    


    Netsmart
      Public Health, Inc., as Buyer and

    


    Netsmart
      Technologies, Inc.

    


    


    
      
        

      

    

    

 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    TABLE
      OF CONTENTS

     

    

      
        	
                ARTICLE
                  1 DEFINITIONS

              	
                1

              
	
                SECTION
                  1.1.

              	
                Certain
                  Definitions.

              	
                1

              
	
                SECTION
                  1.2.

              	
                Index
                  of Other Defined Terms.

              	
                7

              
	 	 	
                 

              
	
                ARTICLE
                  2 TRANSFER OF ASSETS

              	
                9

              
	
                SECTION
                  2.1.

              	
                Transfer
                  of Assets by Seller.

              	
                9

              
	
                SECTION
                  2.2.

              	
                Excluded
                  Assets.

              	
                10

              
	
                SECTION
                  2.3.

              	
                Assumption
                  of Liabilities.

              	
                11

              
	
                SECTION
                  2.4.

              	
                Excluded
                  Liabilities.

              	
                11

              
	
                SECTION
                  2.5.

              	
                Assignment
                  of Contracts and Rights.

              	
                13

              
	
                SECTION
                  2.6.

              	
                Closing.

              	
                13

              
	
                SECTION
                  2.7.

              	
                Purchase
                  Price.

              	
                13

              
	
                SECTION
                  2.8.

              	
                Closing
                  Balance Sheet.

              	
                14

              
	
                SECTION
                  2.9.

              	
                Calculation
                  of Earnings Period Financial Results;
                  Indemnification

              	
                14

              
	
                SECTION
                  2.10.

              	
                Closing
                  Deliveries.

              	
                15

              
	
                SECTION
                  2.11.

              	
                Purchase
                  Price Allocation.

              	
                17

              
	 	 	
                 

              
	
                ARTICLE
                  3 REPRESENTATIONS AND WARRANTIES OF SELLERS

              	
                17

              
	
                SECTION
                  3.1.

              	
                Organization
                  and Qualification.

              	
                17

              
	
                SECTION
                  3.2.

              	
                Authority
                  Relative to this Agreement.

              	
                17

              
	
                SECTION
                  3.3.

              	
                Subsidiaries.

              	
                18

              
	
                SECTION
                  3.4.

              	
                Financial
                  Statements.

              	
                18

              
	
                SECTION
                  3.5.

              	
                Consents
                  and Approvals; No Conflicts or Violations.

              	
                18

              
	
                SECTION
                  3.6.

              	
                Litigation.

              	
                19

              
	
                SECTION
                  3.7.

              	
                Compliance
                  with Applicable Law.

              	
                19

              
	
                SECTION
                  3.8.

              	
                Labor
                  Matters.

              	
                19

              
	
                SECTION
                  3.9.

              	
                Intellectual
                  Property.

              	
                20

              
	
                SECTION
                  3.10.

              	
                Brokers.

              	
                22

              
	
                SECTION
                  3.11.

              	
                Contracts.

              	
                22

              
	
                SECTION
                  3.12.

              	
                [Intentionally
                  Left Blank].

              	
                25

              
	
                SECTION
                  3.13.

              	
                Title
                  to Assets and Continued Operation.

              	
                25

              
	
                SECTION
                  3.14.

              	
                Insurance.

              	
                26

              
	
                SECTION
                  3.15.

              	
                Equipment;
                  Asset Valuation.

              	
                26

              
	
                SECTION
                  3.16.

              	
                Absence
                  of Changes.

              	
                26

              
	
                SECTION
                  3.17.

              	
                Product
                  Warranties, Defects and Liabilities.

              	
                27

              
	
                SECTION
                  3.18.

              	
                Affiliate
                  Transactions.

              	
                28

              
	
                SECTION
                  3.19.

              	
                Customers
                  and Suppliers

              	
                28

              
	
                SECTION
                  3.20.

              	
                Illegal
                  Payments.

              	
                28

              
	
                SECTION
                  3.21.

              	
                Real
                  Property

              	
                28

              
	
                SECTION
                  3.22.

              	
                Environmental
                  Compliance.

              	
                29

              
	
                SECTION
                  3.23.

              	
                Tax
                  Matters.

              	
                29

              
	
                SECTION
                  3.24.

              	
                Employee
                  Benefit Plans.

              	
                30

              


      

       

       

      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

      

       

      
        	 	 	
                 

              
	
                ARTICLE
                  4 REPRESENTATIONS AND WARRANTIES OF BUYER

              	
                31

              
	
                SECTION
                  4.1.

              	
                Organization.

              	
                31

              
	
                SECTION
                  4.2.

              	
                Authority
                  Relative to this Agreement.

              	
                31

              
	
                SECTION
                  4.3.

              	
                Consents
                  and Approvals: No Violations.

              	
                31

              
	
                SECTION
                  4.4.

              	
                Litigation.

              	
                32

              
	
                SECTION
                  4.5.

              	
                Brokers.

              	
                32

              
	
                SECTION
                  4.6.

              	
                Netsmart
                  SEC Reports.

              	
                32

              
	 	 	
                 

              
	
                ARTICLE
                  5 COVENANTS

              	
                33

              
	
                SECTION
                  5.1.

              	
                Additional
                  Agreements; Best Efforts.

              	
                33

              
	
                SECTION
                  5.2.

              	
                Public
                  Announcements.

              	
                33

              
	
                SECTION
                  5.3.

              	
                Employee
                  Benefits.

              	
                33

              
	
                SECTION
                  5.4.

              	
                Expenses.

              	
                34

              
	
                SECTION
                  5.5.

              	
                Certain
                  Other Covenants

              	
                34

              
	
                SECTION
                  5.6.

              	
                Earn-Out
                  Payments.

              	
                34

              
	
                SECTION
                  5.7.

              	
                Name
                  Change of Seller.

              	
                37

              
	
                SECTION
                  5.8.

              	
                Business
                  Confidentiality; Non-Disparagement.

              	
                38

              
	
                SECTION
                  5.9.

              	
                Accounts
                  Receivable.

              	
                38

              
	
                SECTION
                  5.10.

              	
                Netsmart
                  Obligations.

              	
                39

              
	 	 	 
	
                ARTICLE
                  6 TAX MATTERS

              	
                39

              
	
                SECTION
                  6.1.

              	
                Taxes.

              	
                39

              
	
                SECTION
                  6.2.

              	
                Cooperation.

              	
                39

              
	
                SECTION
                  6.3.

              	
                Allocation
                  of Taxes.

              	
                40

              
	 	 	
                 

              
	
                ARTICLE
                  7 NON-COMPETITION; NON-SOLICITATION

              	
                40

              
	
                SECTION
                  7.1.

              	
                Non-Competition.

              	
                40

              
	
                SECTION
                  7.2.

              	
                Non-Solicitation.

              	
                41

              
	
                SECTION
                  7.3.

              	
                Injunctive
                  Relief.

              	
                41

              
	
                SECTION
                  7.4.

              	
                Severability.

              	
                41

              
	 	 	
                 

              
	
                ARTICLE
                  8 SURVIVAL OF REPRESENTATIONS &
                  WARRANTIES;INDEMNIFICATION

              	
                42

              
	
                SECTION
                  8.1.

              	
                Survival
                  of Representations and Warranties.

              	
                42

              
	
                SECTION
                  8.2.

              	
                Survival
                  of Covenants and Agreements.

              	
                42

              
	
                SECTION
                  8.3.

              	
                Indemnification
                  by Sellers.

              	
                42

              
	
                SECTION
                  8.4.

              	
                Indemnification
                  by Buyer.

              	
                42

              
	
                SECTION
                  8.5.

              	
                Thresholds
                  and Limits on Indemnification.

              	
                43

              
	
                SECTION
                  8.6.

              	
                Procedure;
                  Notice of Claims.

              	
                44

              
	
                SECTION
                  8.7.

              	
                Remedies.

              	
                45

              
	
                SECTION
                  8.8.

              	
                Certain
                  Limitations.

              	
                45

              
	 	 	
                 

              
	
                ARTICLE
                  9 MISCELLANEOUS

              	
                45

              
	
                SECTION
                  9.1.

              	
                Entire
                  Agreement; Assignment; Amendments and Waivers.

              	
                45

              
	
                SECTION
                  9.2.

              	
                Validity.

              	
                46

              
	
                SECTION
                  9.3.

              	
                Notices.

              	
                46

              
	
                SECTION
                  9.4.

              	
                Governing
                  Law, Forum Selection, Jurisdiction.

              	
                47

              
	
                SECTION
                  9.5.

              	
                WAIVER
                  OF JURY TRIAL.

              	
                47

              
	
                SECTION
                  9.6.

              	
                Descriptive
                  Headings.

              	
                47

              
	
                SECTION
                  9.7.

              	
                Parties
                  in Interest.

              	
                47

              
	
                SECTION
                  9.8.

              	
                Specific
                  Performance.

              	
                47

              
	
                SECTION
                  9.9.

              	
                Disclosure
                  Generally.

              	
                48

              
	
                SECTION
                  9.10.

              	
                Counterparts

              	
                48

              
	
                SECTION
                  9.11.

              	
                Attorney’s
                  Fees.

              	
                48

              
	
                SECTION
                  9.12.

              	
                Set-Off
                  or Withholding From Promissory Note.

              	
                48

              
	 	 	
                 

              


      

    

     

     

    
      
        
        

      

      
        ii

        
          

        

      

      
        
        

      

       

    

    ASSET
      PURCHASE AGREEMENT

    


    THIS
      ASSET PURCHASE AGREEMENT, dated
      as
      of July 31, 2006 (this “Agreement”),
      is by
      and between QS TECHNOLOGIES, INC., a Georgia corporation (“QS”) and INTELLIGENT
      SYSTEMS CORPORATION, a Georgia corporation (“Parent”) (QS and Parent being
      collectively referred to as “Sellers”),
      and
      NETSMART PUBLIC HEALTH, INC., a Delaware corporation (“Buyer”),
      and
      NETSMART TECHNOLOGIES, INC., a Delaware corporation (“Netsmart”).

    


    RECITALS

    


    WHEREAS,
      QS is engaged in the business (the “Business”)
      of
      designing, developing, selling, licensing, maintaining and supporting software
      products and services for the public health market, as listed on Schedule
      A
      (the
“Products”);
      

    


    WHEREAS,
      Parent is the owner of all of the issued and outstanding shares of capital
      stock
      of QS; 

    


    WHEREAS,
      both QS and Parent own certain of the assets used in connection with and/or
      necessary for the operation of the Business; 

    


    WHEREAS,
      Sellers desire to sell to Buyer, and Buyer desires to purchase from Sellers,
      substantially all of the assets of the Sellers related to the Business (other
      than the Excluded Assets, as defined below), which constitute all of the assets
      principally used in connection with and/or necessary for the operation of the
      Business; 

    


    WHEREAS,
      Sellers desire to sell such assets in consideration of Buyer's obligations
      hereunder, including Buyer's agreement to assume certain of the liabilities
      of
      Sellers relating to the Business (other than the Excluded Liabilities, as
      defined below), all on the terms set forth herein.

    


    AGREEMENT

    


    NOW
      THEREFORE in consideration of the premises and the representations, warranties,
      covenants and agreements herein contained and intending to be legally bound
      hereby, Sellers and Buyer hereby agree as follows:

    


    


    ARTICLE
      1

    DEFINITIONS

    SECTION
      1.1. Certain
      Definitions. 

    


    The
      following terms, as used herein, have the following meanings:

    


    “Action”
means
      any pending or threatened claim, demand, complaint, charge, proceeding, suit,
      action, violation, hearing or investigation (and appeals therefrom) before
      any
      Governmental Authority or other judicial or administrative tribunal or body
      and/or any officer thereof.

    


    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    “Affiliate”
means,
      in respect of any Person, a Person that, directly or indirectly, through one
      or
      more intermediaries controls, is controlled by or is under common control with
      the first-mentioned Person; and “control,” as used in this definition, means the
      unrestricted power, acting alone, to direct or cause the direction of the
      management and policies of a Person. 

    


    “Applicable
      Law”
means,
      with respect to any Person, any domestic or foreign, federal, state or local
      statute, law, ordinance, policy, guidance, rule, administrative interpretation,
      regulation, order, writ, injunction, directive, judgment, decree or other
      requirement of any Governmental Authority applicable to such Person or any
      of
      its Affiliates or any of their respective properties, assets, officers,
      directors, employees, consultants or agents (in connection with such officer's,
      director's, employee's, consultant's or agent's activities on behalf of such
      Person or any of its Affiliates.

    


    “Balance
      Sheet”
means
      the balance sheet of QS dated June 30, 2006. 

    


    “Balance
      Sheet Date”
means
      June 30, 2006.

    


    “best
      efforts”
means
      the efforts a reasonable person in the position of the promisor would use,
      consistent with the practices of companies operating businesses like the
      Business, to achieve the stated goal as expeditiously as possible.

    


    “Bill
      of Sale and Assumption Agreement”
means
      the Bill of Sale and Assumption Agreement, executed and dated as of the Closing
      Date, by and between Seller and Buyer.

    


    “Business
      Day”
means
      any day other than Saturday, Sunday or a day on which banks located in the
      State
      of New York are closed due to a federal holiday.

    


    “Closing
      Balance Sheet”
means
      the balance sheet of QS dated July 31, 2006.

    


    “Closing
      Balance Sheet Date”
means
      July 31, 2006.

    


    “Code”
means
      the Internal Revenue Code of 1986, as amended.

    


    “Confidential
      Information”
means
      information not generally available to the public relating to the Business,
      including, without limitation, all computer software and database information,
      personnel information, financial information, customer lists, supplier lists,
      trade secrets, patented proprietary information, forms, information regarding
      operations, systems, services, know how, computer and any other processed or
      collated data, computer programs, pricing, marketing and advertising data,
      methods, forms, systems, services, designs, marketing ideas, products or
      processes (whether or not capable of being trademarked, copyrighted or
      patented). 

    


    “Contracts”
means
      all contracts, agreements, options, leases, licenses, sales and accepted
      purchase orders, commitments and other instruments of any kind, whether written
      or oral, which relate to the Business and to which a Seller is a party or is
      otherwise bound by on the Closing Date, including the Assumed
      Contracts.

    


    “Damages”
means
      all demands, claims, actions or causes of action, assessments, losses, damages,
      costs, expenses, liabilities, judgments, awards, fines, sanctions, penalties,
      charges and amounts paid in settlement, including reasonable costs, fees and
      expenses of attorneys, accountants, consultants and other agents or independent
      contractors incurred in investigating, preparing for and defending any
      thereof.

    


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    “Earnings
      Period”
shall
      mean the period commencing August 1, 2006 and ending December 31,
      2006.

    


    “Earn-Out
      Payment”
means
      a
      Maintenance Earn-Out Payment, Vital Records Earn-Out Payment or Other Software
      Earn-Out Payment under Section
      5.6.

    


    “EBIT-A”
shall
      mean the Buyer’s earnings before interest, income tax and amortization,
      calculated in accordance with GAAP and, to the extent not inconsistent with
      GAAP, the past practice of QS as reflected in the Financial
      Statements.

    


    “Environmental
      Law”
means
      any applicable federal, state and local law, statute, ordinance, regulation,
      rule, judicial or administrative order or decree, or similar requirement of
      each
      and every federal, and pertinent state and local Governmental Authority,
      pertaining to the protection of human health or the environment including,
      without limitation, the Comprehensive Environmental Response Compensation and
      Liability Act (CERCLA), 42 U.S.C. 9601 et seq., the Resource Conservation
      and Recovery Act (RCRA), 42 U.S.C. 6901 et seq., the Toxic Substances Control
      Act (TSCA), 15 U.S.C. 2601 et seq., and the Water Pollution Control Act
      (FWPCA), 33 U.S.C. 1251 et seq..

    


    “ERISA”
means
      the Employee Retirement Income Security Act of 1974, as amended.

    


    “GAAP”
means
      generally accepted accounting principles in the United States as in effect
      from
      time to time and applied consistently throughout the periods
      involved.

    


    “Governmental
      Authority”
means
      any foreign, domestic, federal, territorial, state or local governmental
      authority, quasi-governmental authority, instrumentality, court, government
      or
      self-regulatory organization, commission, tribunal or organization or any
      regulatory, administrative or other agency, or any political or other
      subdivision, department or branch of any of the foregoing.

    


    “Hazardous
      Substance”
means
      any substance, compound, chemical or element which is (i) defined as a hazardous
      substance, hazardous material, toxic substance, hazardous waste, pollutant
      or
      contaminant under any Environmental Law, or (ii) a petroleum hydrocarbon,
      including crude oil or any fraction thereof, or (iii) a hazardous, toxic,
      corrosive, flammable, explosive, infectious, radioactive, carcinogenic or a
      reproductive toxicant, or (iv) otherwise regulated under any Environmental
      Law.

    


    “Indebtedness”
of
      any
      Person means all obligations of such Person (a) for borrowed money,
      (b) evidenced by notes, bonds, debentures or similar instruments or (c) in
      the nature of guarantees of the obligations described in
      clauses (a) and (b) above of any other Person.

    


    “Information
      Technology”
means
      all computer hardware, software, networks, microprocessors, firmware and other
      information technology and communications equipment currently used in the
      operation of the information technology systems of the Business.

    


    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    “Intellectual
      Property”
means
      all intellectual property owned or licensed (as licensee) by a Seller and used
      in or in connection with the Business, or in any Products, service, technology
      or process currently offered by a Seller in connection with the Business, or
      currently under development by a Seller for use in connection with the Business,
      including: (i) all domestic and foreign copyright interests in any original
      work
      of authorship, whether registered or unregistered, including but not limited
      to
      all copyright registrations or foreign equivalent, all applications for
      registration equivalent, all moral rights, all common-law rights, and all rights
      to register and obtain renewals and extensions of copyright registrations,
      together with all other copyright interests accruing by reason of international
      copyright convention (collectively, “Copyrights”);
      (ii)
      all domestic and foreign patents (including certificates of invention and other
      patent equivalents), provisional applications, patent applications and patents
      issuing therefrom as well as any division, continuation or continuation in
      part,
      reissue, extension, reexamination, certification, revival or renewal of any
      patent, all Inventions and subject matter related to such patents, in any and
      all forms (collectively, “Patents”); (iii) all domestic and foreign trademarks,
      trade dress, service marks, trade names, icons, logos, slogans, and any other
      indicia of source or sponsorship of goods and services, designs and logotypes
      related to the above, in any and all forms, all trademark registrations and
      applications for registration related to such trademarks (including, but not
      limited to intent to use applications), and all goodwill related to the
      foregoing (collectively, “Trademarks”);
      (iv)
      all domain name registrations (collectively “Domain Names”);
      (v)
      any formula, design, device or compilation, or other information which is used
      or held for use by a business, which gives the holder thereof an advantage
      or
      opportunity for advantage over competitors which do not have or use the same,
      and which is not generally known by the public (“Trade
      Secrets”)
      -
      Trade Secrets can include, by way of example, formulas, algorithms, market
      surveys, market research studies, information contained on drawings and other
      documents, and information relating to research, development or testing; (vi)
      novel devices, processes, compositions of matter, methods, techniques,
      observations, discoveries, apparatuses, machines, designs, expressions, theories
      and ideas, whether or not patentable; (vii) scientific, engineering, mechanical,
      electrical, financial, marketing or practical knowledge or experience useful
      in
      the operation of the Business; (viii) (A) any and all computer programs and/or
      software programs (including all source code, object code, firmware, programming
      tools and/or documentation), (B) machine readable databases and compilations,
      including any and all data and collections of data, and (C) all content
      contained on internet site(s) of QS or, to the extent related to the Business,
      of Parent (collectively, “Software”);
      (ix)
      all documentation and media constituting, describing or relating to the above,
      including memoranda, manuals, technical specifications and other records
      wherever created throughout the world; and (x) the right to sue for past,
      present, or future infringement and to collect and retain all damages and
      profits related to the foregoing.

    


    “Knowledge
      of Sellers”
means
      the actual knowledge of Kevin Davidson of QS, and Leland Strange and Bonnie
      Herron of Parent and shall be deemed to include a representation that such
      individuals have made all reasonable inquiries under the
      circumstances.

    


    “Liability”
means,
      with respect to any Person, any liability or obligation of such Person of any
      kind, character or description, whether known or unknown, absolute or
      contingent, accrued or unaccrued, liquidated or unliquidated, secured or
      unsecured, joint or several, due or to become due, vested or unvested,
      executory, determined, determinable or otherwise.

    


    “Lien”
means,
      with respect to any asset, any mortgage, title defect or objection, lien,
      pledge, charge, security interest, hypothecation, restriction, encumbrance
      or
      charge of any kind in respect of such asset.

    


    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    “Maintenance
      Earn-Out Period”
means
      the fiscal year commencing January 1, 2007 and ending on December 31,
      2007.

    


    “Maintenance
      Revenue”
means
      all Revenue from support, warranty and maintenance services during the
      Maintenance Earn-Out Period but excluding any revenue attributable (i) third
      party licensed products, or (ii) professional services including systems
      integrator fees, customization, systems integration, implementation and roll
      out
      fees.

    


    “Netsmart”
means
      Netsmart Technologies, Inc., a Delaware corporation and the owner of all of
      the
      issued and outstanding capital stock of Buyer.

    


    “New
      Customer”
means
      any Person who is not a licensee of any of the Products as of the date
      hereof.

    


    “NTST
      Common Stock”
means
      the common stock, $.10 par value, of Netsmart. 

    


    “Order”
means
      any order, judgment, decree, mandate, writ, injunction, ruling, assessment
      or
      award. 

    


    “Ordinary
      Course of Business”
means
      the ordinary course of business consistent with past custom and practice
      (including, without limitation, with respect to quantity, quality and
      frequency).

    


    “Other
      Software”
means
      all Software Products of QS other than Vital Records Products.

    


    “Other
      Software Contract Awards”
means
      the sum of (i) the dollar value of all contracts for Other Software awarded
      during the Software Earn-Out Period to New Customers, (ii) the dollar value
      of
      all upgrade or additional contract awards for Other Software to existing
      customers during the Software Earn-Out Period, and (iii) any Revenue from
      existing contracts with Identified Customers that is not included in the
      calculation of the Earnings Period Revenue Amount, minus
      (iv) any
      sales of third party products or services, or Netsmart University or InfoScriber
      products and (v) Revenue related to the Accounts Receivable of Cleveland and
      Howard listed on Schedule
      5.9(b).
      

    


    “Permitted
      Liens”
means
      (i) Liens for Taxes or governmental assessments, charges or claims the
      payment of which is not yet due, or for Taxes the validity of which are being
      contested in good faith by appropriate proceedings; (ii) statutory Liens of
      landlords and Liens of carriers, warehousemen, mechanics, materialmen and other
      similar Persons and other Liens imposed by Applicable Law incurred in the
      Ordinary Course of Business for sums not yet delinquent or being contested
      in
      good faith; and (iii) Liens relating to deposits made in the Ordinary
      Course of Business in connection with workers' compensation, unemployment
      insurance and other types of social security or to secure the performance of
      leases, trade contracts or other similar agreements.

    


    “Person”
means
      an individual, corporation, partnership, limited liability company, association,
      trust, unincorporated organization, Governmental Authority or other legal
      entity.

    


    “Prime
      Rate”
means
      the prime rate established by Bank of America as in effect from
      time-to-time.

    


    “QS
      Budget”
means
      the budgeted revenue, costs and expenses related to the Business for the period
      beginning on the Closing Date and ending on December 31, 2006 as set forth
      on
Schedule
      B.
      

    


    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    “Release”
means
      any release, spill, emission, leaking, pumping, pouring, dumping, emptying,
      injection, deposit, disposal, discharge, dispersal, leaching, or migration
      on or
      into the environment or in, on, under, into or out of any property currently
      owned, leased or operated by Seller.

    


    “Remedial
      Action”
means
      those response actions, including any investigation, testing or monitoring
      activities required by Environmental Law or by any Governmental Authority to
      clean up, remove, contain, treat, investigate or abate any Hazardous Substance
      on or in connection with any property (including, without limitation, actions
      to
      address Releases of Hazardous Substances to the environment as of the Closing
      Date). 

    


    “Revenue”
shall
      mean the Buyer’s revenue calculated in accordance with GAAP and, to the extent
      not inconsistent with GAAP, the past practice of QS as reflected in the
      Financial Statements, including but not limited to revenue from support,
      warranty, maintenance, services and license sales but excluding any sales of
      third party products or services, or Netsmart University or InfoScriber
      products.

    


    “Seller
      Disclosure Schedules”
means
      the disclosure schedules with respect to this Agreement concurrently delivered
      by Sellers to Buyer.

    


    “Seller
      Material Adverse Effect”
means
      a
      change, effect, fact, event or circumstance which has had, or will likely have,
      a material adverse effect on, or a material adverse change in, as the case
      may
      be, without regard to any potential insurance coverage or potential tax benefits
      (with respect to any such event), the business, condition, financial or
      otherwise, assets, liabilities, or results of operations of Sellers, taken
      as a
      whole; provided,
      however,
“Seller
      Material Adverse Effect” shall not include changes exclusively related to (i)
      any event as to which Buyer has provided written consent hereunder; or (ii)
      the
      execution, delivery or performance of this Agreement (including any announcement
      relating to this Agreement or the fact that Buyer is acquiring the Transferred
      Assets).

    


    “Software
      Earn-Out Period”
means
      the period commencing on the Closing Date and ending on December 31,
      2007.

    


    “Subsidiary”
means,
      with respect to any Person, (i) any corporation as to which more than 50%
      of the outstanding stock having ordinary voting rights or power (and excluding
      stock having voting rights only upon the occurrence of a contingency unless
      and
      until such contingency occurs and such rights may be exercised) is owned or
      controlled, directly or indirectly, by such Person and/or by one or more of
      such
      Person's Subsidiaries and (ii) any partnership, joint venture or other
      similar relationship between such Person (or any Subsidiary thereof) and any
      other Person (whether pursuant to a written agreement or
      otherwise).

    


    “Tax”
means
      all taxes imposed of any nature including federal, state, local or foreign
      net
      income tax, alternative or add-on minimum tax, profits or excess profits tax,
      franchise tax, gross income, adjusted gross income or gross receipts tax,
      employment related tax (including employee withholding or employer payroll
      tax,
      FICA or FUTA), real or personal property tax or ad valorem tax, sales or use
      tax, excise tax, stamp tax or duty, any withholding or back up withholding
      tax,
      value added tax, severance tax, prohibited transaction tax, premiums tax,
      environmental tax, intangibles tax or occupation tax, together with any interest
      or any penalty, addition to tax or additional amount imposed by any Governmental
      Authority (domestic or foreign) responsible for the imposition of any such
      tax.

    


    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    “Tax
      Return”
means
      all returns, reports, forms or other information required to be filed with
      respect to any Tax.

    


    “Total
      Purchase Price”
means
      (a) the Cash Component in accordance with Section
      2.7(a)
      herein,
      (b) the Promissory Note to be issued to Seller by Buyer in accordance with
      Section
      2.7(b)
      herein,
      (c) the Earn-Out Payments to be paid to Seller by Buyer in accordance with
      Section
      5.6
      herein,
and
      (d) the
      dollar amount of the Liabilities assumed by Buyer in accordance with
Section
      2.3.

    


    “Vital
      Records Contract Awards”
means
      the sum of (i) the dollar value of all contracts for Vital Record Products
      awarded during the Software Earn-Out Period to New Customers, (ii) the dollar
      value of all upgrade or additional contract awards for Vital Record Products
      to
      existing customers during the Software Earn-Out Period, and (iii) any Revenue
      from existing contracts with Identified Customers that is not included in the
      calculation of the Earnings Period Revenue Amount minus
      (iv) any
      sales of third party products or services and (v) any Revenue related to the
      Accounts Receivable of Nebraska listed on Schedule
      5.9(b).
      

    


    “Vital
      Records Products”
means
      Software Products so identified on Schedule
      A.

    SECTION
      1.2. Index
      of Other Defined Terms. 

    


    In
      addition to those terms defined above, the following terms shall have the
      respective meanings given thereto in the sections indicated below:

     

    
      	
              Defined
                Term

            	
              Section

            
	 	 
	
              “Accounting
                Firm”

            	
              2.8

            
	
              “Agreement”

            	
              Preamble

            
	
              “Assumed
                Contract”

            	
              2.1(b)

            
	
              “Assumed
                Liabilities”

            	
              2.3

            
	
              “Assumed
                Warranties”

            	
              2.3(b)

            
	
              “Business”

            	
              Recitals

            
	
              “Buyer”

            	
              Preamble

            
	
              “Buyer
                Indemnified Parties”

            	
              8.3

            
	
              “Buyer
                Material Adverse Effect”

            	
              4.1

            
	
              “Buyer’s
                Basket”

            	
              8.3(a)

            
	
              “Cash
                Component”

            	
              2.7(a)

            
	
              “Claim”

            	
              8.6(a)

            
	
              “Claim
                Notice”

            	
              8.6(a)

            
	
              “Closing”

            	
              2.6

            
	
              “Closing
                Date”

            	
              2.6

            
	
              “COBRA”

            	
              2.4(f)

            
	
              “Competitive
                Business”

            	
              7.1

            
	
              “Continuing
                Employee”

            	
              5.3(a)

            
	
              “Copyrights”

            	
              1.1

            
	
              “Customer
                Contract”

            	
              2.1(b)

            


    

     

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    
      	
              “Dispute
                Notice”

            	
              5.6(e)

            
	
              “Domain
                Names”

            	
              1.1

            
	
              “Earnings
                Indemnity Amount”

            	
              2.9(c)

            
	
              “Earnings
                Period EBIT-A Amount”

            	
              2.9(a)

            
	
              “Earnings
                Period Revenue Amount”

            	
              2.9(a)

            
	
              “Earn-Out
                Payment Date”

            	
              5.6(b)

            
	
              “Earn-Out
                Statement” 

            	
              5.6(e)

            
	
              “Employee
                Benefit Plans”

            	
              3.24

            
	
              “Employment
                Agreements”

            	
              5.3(a)

            
	
              “Environmental
                Permits”

            	
              3.22(c)

            
	
              “Equipment”

            	
              2.1(a)

            
	
              “ERISA
                Affiliates”

            	
              3.24

            
	
              “Excluded
                Assets”

            	
              2.2

            
	
              “Excluded
                Liabilities”

            	
              2.4

            
	
              “Final
                EBIT-A Amount”

            	
              2.9(b)

            
	
              “Final
                Revenue Amount”

            	
              2.9(b)

            
	
              “Financial
                Statements”

            	
              3.4(a)

            
	
              “Governmental
                Contracts”

            	
              3.12(a)

            
	
              “Identified
                Customers”

            	
              2.9

            
	
              “Incentive
                Payments”

            	
              3.24(b)

            
	
              “Indemnified
                Party”

            	
              8.6(a)

            
	
              “Indemnifying
                Party”

            	
              8.6(a)

            
	
              “Leased
                Real Property”

            	
              3.21(b)

            
	
              “License”

            	
              3.9(b)

            
	
              “Loss”
                or “Losses”

            	
              8.3

            
	
              “Maintenance
                Earn-Out Payment”

            	
              5.6(a)

            
	
              “Material
                Contracts”

            	
              3.11(a)

            
	
              “Negotiation
                Period”

            	
              8.6(e)

            
	
              “Other
                Software Earn-Out Payment”

            	
              5.6(b)

            
	
              “Patents”

            	
              1.1

            
	
              “Performance
                Liability”

            	
              2.3(e)

            
	
              “Post-Closing
                Tax Period”

            	
              6.3

            
	
              “PTO”

            	
              3.9(g)

            
	
              “Pre-Closing
                Tax Period”

            	
              6.3

            
	
              “Price
                Allocation”

            	
              2.9(a)

            
	
              “Products”

            	
              Recitals

            
	
              “Promissory
                Note”

            	
              2.7(b)

            
	
              “Proposed
                Closing Balance Sheet”

            	
              2.8

            
	
              “Proposed
                Earnings Calculations”

            	
              2.9(a)

            
	
              “Proposed
                Revised Earnings Calculations”

            	
              2.9(b)

            
	
              “Receivables”

            	
              2.2(b)

            
	
              “Review
                Period”

            	
              5.6(e)

            
	
              “SEC
                Reports”

            	
              4.6

            
	
              “Seller”

            	
              Preamble

            
	
              “Seller
                Indemnified Party”

            	
              8.4

            
	
              “Seller
                Representatives”

            	
              5.6(c)

            
	
              “Sellers’
                Basket”

            	
              8.5(b)

            
	
              “Services”

            	
              5.9(a)

            
	
              “Software”

            	
              1.1

            
	
              “Submission
                Date”

            	
              2.8

            
	
              “Third-Party
                Claim”

            	
              8.6(b)

            
	
              “Trademarks”

            	
              1.1

            
	
              “Trade
                Secrets”

            	
              1.1

            
	
              “Transferred
                Assets”

            	
              2.1

            
	
              “Unearned
                Revenue”

            	
              2.3(a)

            
	
              “Vital
                Records Earn-Out Payment”

            	
              5.6(b)

            


    

    


    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    ARTICLE
      2

    TRANSFER
      OF ASSETS

     

    SECTION
      2.1. Transfer
      of Assets by Seller. 

    


    Upon
      the
      terms and subject to the conditions of this Agreement and in reliance upon
      the
      representations, warranties and agreements herein set forth, Buyer agrees to
      purchase from Sellers and Sellers agree to sell or cause to be sold to Buyer
      at
      the Closing, free and clear of all Liens, other than Permitted Liens, certain
      of
      the assets, properties, rights, licenses, permits, contracts, causes of action,
      claims and operations relating to or used in connection with the Business
      (except for the Excluded Assets), wherever located, whether tangible or
      intangible, real, personal or mixed, that are owned by, leased or licensed
      by,
      or in the possession or control of, Sellers (the collective assets, properties,
      rights, licenses, permits, contracts, causes of action, claims, operations
      and
      businesses to be transferred to Buyer by Sellers pursuant hereto are referred
      to
      collectively herein as the “Transferred
      Assets”).
      Without limiting the generality of the foregoing, the Transferred Assets shall
      include all of Sellers’ right, title and interest in and to the following:


    


    (a) all
      computer equipment (including all hardware, servers, software (other than
      off-the-shelf software) and other Information Technology), communications
      equipment, spare and replacement parts and other tangible property (and
      interests in any of the foregoing) of Sellers as set forth on Schedule
      2.1(a)
      (collectively, the “Equipment”),
      together with all warranties and licenses issued to Seller in connection with
      the Equipment, and any claims, credits and rights of recovery with respect
      to
      the Equipment;

    


    (b) all
      of
      the Contracts to which Seller is a party (and Seller's rights thereunder) that
      are (i) set forth on Schedule
      2.1(b),
      (ii) not
      in default and as to which no claim of default exists on the Closing Date,
      and
      (iii) enforceable by Buyer without the consent of a third party (or for which
      a
      consent is obtained on or prior to the Closing Date) (collectively, the
“Assumed
      Contracts”);
      including but not limited to Contracts under which QS licenses software or
      provides services to QS’ customers (“Customer
      Contracts”);

    


    (c) 
      all
      source code and object code Software for the Products; 

    


    (d) all
      prepaid charges, expenses and work-in-process of Sellers relating to the
      Transferred Assets, including any such charges and expenses with respect to
      leases and rentals;

    


    (e) all
      rights of Sellers to insurance proceeds with respect to claims for Damages
      to
      the Transferred Assets, unless such proceeds reimburse Sellers for the
      previously completed repair or restoration of such Transferred
      Assets;

    


    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    (f) all
      of
      Sellers’ rights, claims, credits, causes of action or rights of set-off against
      third parties relating to, or arising in connection with, the Business or the
      Transferred Assets (other than those relating exclusively to Excluded
      Liabilities), whether liquidated or unliquidated, fixed or contingent, including
      claims pursuant to all warranties, representations and guarantees made by
      suppliers, manufacturers, contractors and other third parties in connection
      with
      products or services purchased by or furnished to QS;

    


    (g) except
      as
      set forth in Section
      2.2(e),
      all
      records, files and papers of Sellers related to the Business and currently
      in
      its possession (which Sellers acknowledge constitutes all records, files and
      papers related to the Business and currently in their possession), whether
      in
      hard copy or computer format, including invoices, sales and promotional
      literature, manuals and data, sales and purchase correspondence, and
      documentation developed or used for accounting, marketing, design, engineering,
      manufacturing or any other purpose related primarily to the conduct of the
      Business at any time prior to the Closing, including all creative materials,
      advertising and promotional materials and all other printed or written materials
      and a copy of QS’s employment records, to the extent Sellers are permitted by
      law to provide such employment records to Buyer; 

    


    (h) all
      lists
      and records pertaining to present, former and prospective customers, and
      suppliers of the Business;

    


    (i) all
      Intellectual Property, Confidential Information, and other intangible assets
      of
      such nature, including all agreements pertaining to the foregoing; and


    


    (j) all
      goodwill associated with the Business and the Transferred Assets, including,
      but
      not limited to, the name “QS Technologies” and all derivations
      thereof.

     

    SECTION
      2.2. Excluded
      Assets.

     

    Notwithstanding
      anything herein to the contrary, Sellers will retain and not transfer, convey,
      assign or deliver to Buyer, and neither Buyer nor any of Buyer's Affiliates
      will
      acquire any right, title or interest in or to any of the following assets
      (collectively, the “Excluded Assets”):

    


    


    (a) all
      cash
      and cash equivalents;

    


    (b) all
      accounts receivable, together with any unpaid interest or fees accrued thereon
      or other amounts due with respect thereto, of QS existing on the Closing Date
      and any security or collateral therefor, including recoverable advances and
      deposits (collectively, the “Receivables”);
      

    


    (c) all
      rights to causes of action, lawsuits, claims and demands of any nature available
      to or being pursued by Seller with respect to the Excluded Assets or the
      Excluded Liabilities; 

    


    (d) Sellers'
      rights under this Agreement, the Bill of Sale and Assumption Agreement and
      the
      Promissory Note; 

    


    (e) Sellers’
      organizational records, minute books, tax records, employment records, and
      a
      copy of all of Seller’s financial and accounting records;

    


    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    (f) The
      agreement between QS and Parent pursuant to which Parent provides certain
      administrative, accounting and personnel services to QS; and

    


    (g) Any
      amounts owed to QS from any of its Affiliates. 

     

    SECTION
      2.3. Assumption
      of Liabilities.

    


    Upon
      the
      terms and subject to the conditions of this Agreement and in reliance upon
      the
      representations, warranties and agreements herein set forth, Buyer agrees,
      effective at the time of Closing, to assume, timely perform and timely discharge
      only the following Liabilities with respect to the Business and the Transferred
      Assets (collectively, the “Assumed
      Liabilities”):

    


    (a) all
      executory obligations of QS under, or arising after the Closing out of, the
      Assumed Contracts, including those necessary to enable Buyer to recognize the
      unearned revenue identified on the Balance Sheet (“Unearned
      Revenue”);
      

    


    (b) all
      obligations of QS with respect to product warranties and service contracts
      related to the Assumed Contracts (collectively, the “Assumed
      Warranties”);
      

    


    (c) all
      Liabilities of the Business relating to the Transferred Assets (other than
      Excluded Liabilities) to the extent resulting from events or conditions
      occurring or arising on or after the Closing Date; and

    


    (d) all
      Liabilities of QS related to Accounts Payable, Accrued Commissions, Accrued
      Payroll, Employee vacation pay, and Unearned Revenue to the extent such accruals
      are set forth in the Closing Balance Sheet.

    


    (e) Notwithstanding
      the foregoing, in the event that the Closing Balance Sheet shall reflect current
      assets and property, plant and equipment of less than $190,000, current
      liabilities of more than $262,500 or unearned revenue of less than $1,760,000,
      then the Assumed Liabilities shall be reduced by an amount sufficient to ensure
      that the total dollar amount of Assumed Liabilities, net of the value of the
      Transferred Assets, shall not exceed $2,050,000 (such amount being the
“Liability Adjustment”); provided that no such adjustment shall be required in
      the event that the amount of the Liability Adjustment so calculated shall be
      less than $50,000. For the avoidance of doubt, Buyer and Sellers agree that
      in
      the event the Liability Adjustment is equal to or exceeds $50,000, one or more
      liabilities in the amount of Liability Adjustment and previously included as
      an
      Assumed Liability shall be retained by Sellers and shall become an Excluded
      Liability; provided, however, Sellers shall in no event be obligated to retain
      any Assumed Liability that consists solely of a performance obligation as
      opposed to an obligation to pay money (a “Performance Liability”). In the event
      the Assumed Liabilities other than Performance Liabilities are insufficient
      to
      effect the adjustment contemplated by this Section, the Buyers shall be entitled
      to a set-off against the Promissory Note in the amount of the Liability
      Adjustment not eligible to be retained by Sellers in accordance with the
      preceding sentence, which set off shall be applied to payments under the
      Promissory Note in the manner provided in Section
      9.12.

     

    SECTION
      2.4. Excluded
      Liabilities. 

    


    Except
      for the Assumed Liabilities, Buyer does not assume, agree to perform or
      discharge, indemnify Sellers against, or otherwise have any responsibility
      for
      any Liabilities of Sellers, whether fixed or contingent, and whether arising
      prior to, on or after the Closing Date (the “Excluded
      Liabilities”),
      including, without limitation, any of the following Liabilities:

    


    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    (a) any
      Indebtedness of QS other than to the extent arising following the Closing Date
      under any of the Assumed Contracts; 

    


    (b) any
      Liability of Sellers for Taxes relating to the Business or the Transferred
      Assets attributable to any period prior to the Closing Date including any
      Liability of Sellers for such periods for the unpaid taxes of any Person as
      a
      transferee or successor, by contract or otherwise; 

    


    (c) any
      Liability of Sellers to indemnify any Person by reason of the fact that such
      Person was a director, officer, employee or agent of either Seller;

    


    (d) any
      Liability of Sellers to any stockholder or Affiliate of Sellers other than
      pursuant to any Assumed Contract;

    


    (e) any
      Liability of Sellers arising out of or resulting from non-compliance with any
      Applicable Law with respect to the Business prior to the Closing;

    


    (f) except
      as
      specifically provided in Section
      2.3(d),
      any
      Liability of Sellers for making payments or providing benefits of any kind
      to
      any current or former employees that accrued or arose prior to the Closing
      Date,
      including, without limitation, (A) any Liability to provide any such employees
      notices and continuation of health benefit coverage required to be provided
      to
      all employees or the beneficiaries or dependents of such employees, under Part
      6
      of Subtitle B of Title I of ERISA, Section 4980B(f) of the Code and state or
      local laws with the same or similar purpose (herein collectively referred to
      as
“COBRA”),
      (B)
      any Liability in respect of medical and other benefits for retirees, (C) any
      Liability in respect of work related employee injuries or workmen’s compensation
      claims, and (D) any Liability of Seller with respect to any severance
      obligations owed to employees of Seller resulting from any termination initiated
      by Seller on or before the Closing Date, except to the extent such obligations
      arise from the failure of Buyer fully to perform its obligations under Section
      5.3 hereof; 

    


    (g) expenses
      incurred by Sellers in connection with the transactions contemplated herein,
      including, without limitation, fees and expenses of Seller’s counsel and
      accountants;

    


    (h) any
      obligation or liability of Sellers to the Buyer created by this
      Agreement;

    


    (i) any
      Liability, whether presently existing or hereafter arising, which is
      attributable solely to an Excluded Asset;

    


    (j) any
      Liability arising from Sellers’ failure to comply with the bulk transfer laws of
      any applicable jurisdiction with respect to the consummation of the transactions
      contemplated hereby;

    


    (k) any
      Liability for uncleared checks of Sellers or the bank accounts of
      Sellers;

    


    (l) any
      Liability resulting from or relating to any Actions against Sellers based on
      events, circumstances or conditions occurring or existing prior to Closing;
      and

    


    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    (m) any
      Liability not otherwise constituting an Assumed Liability. 

     

    SECTION
      2.5. Assignment
      of Contracts and Rights. 

     

    With
      respect to any Contract as to which the terms thereof require the consent of
      a
      third party for the assignment of such Contract to Buyer and such consent has
      not been obtained on or before the Closing Date: 

    


    (a) promptly
      after the date hereof, to the extent requested by Buyer, Sellers will use their
      best efforts to obtain the written consent of the other parties to any such
      Contract for the assignment of such Contract to Buyer.

    


    (b) Sellers
      and Buyer shall cooperate in an arrangement reasonably satisfactory to Buyer
      and
      Sellers under which Buyer will obtain, to the extent practicable, the claims,
      rights and benefits of such Contract and assume the corresponding obligations
      thereunder in accordance with this Agreement, including subcontracting,
      sub-licensing or sub-leasing to Buyer, or under which Sellers would enforce
      for
      the benefit of Buyer, with Buyer assuming QS’ obligations, any and all claims,
      rights and benefits of QS against a third party thereto.

    


    (c) Subject
      to the provisions of Section
      5.9,
      and
      until the transfer of such Contract to Buyer pursuant to this Section 2.5,
      Sellers
      will promptly pay to Buyer all monies received by Sellers under any such
      Contract or any claim, right or benefit arising thereunder. 

    


    (d) Upon
      the
      receipt of the written consent pursuant to Section
      2.5(a),
      or at
      such earlier time as Buyer shall waive Sellers’ obligations under this
Section
      2.5,
      such
      Contract will become an “Assumed
      Contract”
      hereunder.

     

    SECTION
      2.6. Closing.

    


    The
      closing (the “Closing”)
      of the
      transactions contemplated by this Agreement shall take place at the offices
      of
      Kramer, Coleman, Wactlar & Lieberman, 100 Jericho Quadrangle, Jericho, New
      York, on the date of this Agreement (the “Closing
      Date”),
      or
      simultaneously at such office and one or more other offices by means of fax,
      email or other electronic delivery of documents.

     

    SECTION
      2.7. Purchase
      Price.

    


    In
      consideration of the sale, transfer, conveyance, and assignment of the
      Transferred Assets by Seller to Buyer at the Closing, and in reliance upon
      both
      the representations and warranties of Sellers made herein and the faithful
      performance by Sellers of their covenants herein, Buyer agrees to assume the
      Assumed Liabilities in accordance with Section
      2.3
      and to
      pay to Sellers the Total Purchase Price as follows:

    


    (a) Cash
      Component:
      at the
      Closing, to Parent, the sum of $1,900,000 (the “Cash
      Component”).
      The
      payment of the Cash Component shall be made by wire transfer in immediately
      available funds to such bank account as Parent shall have designated in writing
      to Buyer no less than one (1) Business Day prior to Closing; and

    


    (b) Promissory
      Note:
      a
      promissory note of Netsmart payable to the order of Parent in the principal
      amount of $1,435,000, which principal amount shall bear interest at the Prime
      Rate at Closing and be fully amortized in equal monthly installments over a
      36-month period, in the form of Exhibit
      A
      hereto
      (the “Promissory
      Note”).
      

    


    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    (c) Earn-Out
      Payments.
      Buyer
      shall pay certain Earn-Out Payments to Sellers as provided in Section
      5.6
      of this
      Agreement.

     

    SECTION
      2.8. Closing
      Balance Sheet. 

    


    Within
      thirty (30) days after the Closing Date, Sellers shall prepare and present
      to
      Buyer a balance sheet as of July 31, 2006 (the "Proposed
      Closing Balance Sheet"),
      which
      Proposed Closing Balance Sheet shall be prepared so that it presents fairly,
      in
      all material respects, the financial position of QS as of the Closing Balance
      Sheet Date with respect to the Transferred Assets and Assumed Liabilities,
      in
      accordance with GAAP and, to the extent not inconsistent with GAAP, past
      practice of QS. The
      Proposed Closing Balance Sheet shall be binding upon the parties to this
      Agreement on the thirtieth (30th)
      day
      after Buyer’s receipt of the Proposed Closing Balance Sheet unless (i) Buyer
      gives written notice of agreement with the Proposed Closing Balance Sheet to
      Sellers prior to such date (in which event the Proposed Closing Balance Sheet
      shall be binding upon the parties as of the date of Sellers receipt of such
      notice) or (ii) Buyer gives written notice of disagreement with any of the
      values or amounts contained therein to Sellers prior to such date, specifying
      in
      reasonable detail the nature and extent of such disagreement. If Buyer and
      Sellers mutually agree upon the Proposed Closing Balance Sheet after Sellers’
receipt of a notice of disagreement from Buyer, such agreement shall be binding
      upon the parties to this Agreement. Buyer and Sellers shall use best efforts
      to
      resolve any disagreements concerning the Proposed Closing Balance
      Sheet.

     

    SECTION
      2.9. Calculation
      of Earnings Period Financial Results; Indemnification 

     

    (a) On
      or
      before the thirtieth day following the preparation of audited financial
      statements of Buyer for the fiscal year ending December 31, 2006 but no later
      than April 30, 2007, Buyer will prepare and present to the Sellers a calculation
      of the Revenue and the EBIT-A for the Earnings Period (the “Proposed
      Earnings Calculations”),
      which
      Proposed Earnings Calculations shall provide line item detail at least as
      detailed as that provided in the QS Budget and shall identify all sources of
      Revenue, including but not limited to customers named in the QS Budget (the
      “Identified
      Customers”).
      The
      parties agree that the Proposed Earnings Calculations shall be prepared in
      accordance with GAAP and, to the extent not inconsistent with GAAP, past
      practices of QS; provided however, Revenue shall not include the amounts
      associated with the Accounts Receivable identified on Schedule
      5.9(b)
      for
      Cleveland, Howard and Nebraska, but shall include the amount identified on
      Schedule
      5.9(c)
      for the
      Ohio Death module to the extent that such Revenue is recognizable by the date
      when the Proposed Earnings Calculation is due. Notwithstanding the above, Buyer
      agrees that the costs and expenses included in the calculation of the Proposed
      Earnings Calculations (i) shall be consistent with the types and amounts of
      historical expenses and budgeted expenses as shown in the QS Budget; (ii) shall
      be consistent with the conduct of the Business prior to the Closing Date, (iii)
      shall not include any allocation of corporate overhead or other types or amounts
      for charges or expenses not associated with the Business prior to the Closing
      Date or not included in the QS Budget; (iv) shall not include any costs or
      expenses related to the transactions contemplated in this Agreement; and (v)
      shall include any amounts payable by Netsmart under the lease for the Leased
      Real Property. Furthermore, the Revenue included in the Proposed Earnings
      Calculations shall include any Unearned Revenue transferred to Buyer that Buyer
      determines it may not be permitted to recognize but which would have been
      otherwise earned by QS under GAAP during the Earnings Period if the sale to
      Buyer had not occurred. Buyer and Sellers acknowledge and agree that pro forma
      adjustments may be required to the audited financial statements in order to
      prepare the Proposed Earnings Calculations as required hereunder. The
      Revenue and EBIT-A for the Earnings Period, as finally determined pursuant
      to
Section
      2.9(a)
      and
      agreed to by the parties in accordance with Section
      2.9(c)
      is
      referred to herein as the “Earnings
      Period Revenue Amount”
or
      “Earnings
      Period EBIT-A Amount,”
as
      the
      case may be.

    


    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    (b) In
      the
      event that the Earnings Period Revenue Amount is less than $1,995,000 or the
      Earnings Period EBIT-A Amount is less than $1,045,000, Buyer
      will prepare and present to the Sellers a revised calculation of (i) the Revenue
      for the Earnings Period plus the Revenue attributable to the Identified
      Customers for the period
      from
      January 1, 2007 through January 31, 2007, and (ii) the EBIT-A for the Earnings
      Period plus the EBIT-A attributable to the Identified Customers for the period
      from January 1, 2007 through January 31, 2007 (the “Proposed
      Revised Earnings Calculations”).
      The
      parties agree that the Proposed Revised Earnings Calculations shall be prepared
      in accordance with Section
      2.9(a)
      above.
The
      Revenue and EBIT-A, as finally determined pursuant to Section
      2.9(b)
      and
      agreed to by the parties in accordance with Section
      2.9(c)
      is
      referred to herein as the “Final
      Revenue Amount”
or
      “Final
      EBIT-A Amount,”
as
      the
      case may be.

    


    (c) The
      Proposed Earnings Calculations or Proposed Revised Earnings Calculations, as
      the
      case may be, shall be binding upon the parties to this Agreement unless Sellers
      give written notice of disagreement with any of said values or amounts or items
      in the Proposed Earnings Calculations or Proposed Revised Earnings Calculations
      to Buyer within fifteen (15) Business Days after its receipt of the Proposed
      Earnings Calculations or Proposed Revised Earnings Calculations, specifying
      in
      reasonable detail the nature and extent of such disagreement. The parties shall
      use best efforts to resolve any disagreement timely raised by Sellers.


    


    (d) In
      the
      event that the Final Revenue Amount is less than $1,995,000 or the Final EBIT-A
      Amount is less than $1,045,000, Buyer shall be entitled to receive from Sellers
      an amount of liquidated damages
      (the
“Earnings
      Indemnity Amount”)
      in an
      amount equal to the
      greater of (i) 50% of the amount by which the Final Revenue Amount is less
      than
      $2,100,000, and (ii) 100% of the amount by which Final EBIT-A Amount is less
      than $1,100,000,
      which
      Earnings Indemnity Amount shall be payable solely by means of a set-off against
      the amounts payable under the Promissory Note, which
      set
      off shall be applied to payments under the Promissory Note in the manner
      provided in Section
      9.12.

    


    


    SECTION
      2.10.  Closing
      Deliveries.

    


    (a) At
      the
      Closing, to be held simultaneously with the execution and delivery of this
      Agreement, Sellers shall deliver, or cause to be delivered, to the Buyer the
      following: 

    


    (i) A
      copy of
      resolutions duly adopted by Sellers, authorizing the execution, delivery and
      performance of this Agreement and the Bill of Sale and Assumption Agreement,
      and
      a certificate of the respective secretaries of Sellers, dated the Closing Date,
      to the effect that such resolutions were duly adopted and are in full force
      and
      effect as of the Closing Date;

    


    
      
        
        

      

      
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    (ii) A
      duly
      executed counterpart of the Bill of Sale and Assumption Agreement in form and
      substance reasonably satisfactory to Buyer, and any other instruments of
      transfer necessary to transfer ownership to Buyer of the Transferred Assets;
      

    


    (iii) Instruments
      that shall be effective to transfer to Buyer all of Sellers’ right, title and
      interest in and to the Intellectual Property of Sellers included in the
      Transferred Assets in form suitable for filing with the necessary Governmental
      Authorities;

    


    (iv) A
      certificate of good standing from the Secretary of State of QS’ jurisdiction of
      incorporation and from the Secretary of State of each jurisdiction in which
      QS
      is qualified to do business as set forth on Schedule
      3.1;
      

    


    (v) A
      certificate of good standing from the Secretary of State of Parent’s
      jurisdiction of incorporation; and 

    


    (vi) such
      other and further documents, instruments, certificates and agreements reasonably
      deemed by Buyer’s counsel to be necessary to effectuate the transactions
      contemplated by this Agreement;

    


    (b) At
      the
      Closing, and simultaneously with the execution and delivery of this Agreement,
      the Buyer shall deliver, or cause to be delivered, to Sellers the
      following:

    


    (i) A
      copy of
      resolutions duly adopted by Buyer, authorizing the execution, delivery and
      performance of this Agreement and the Bill of Sale and Assumption Agreement,
      and
      a certificate of the secretary of Buyer, dated the Closing Date, to the effect
      that such resolutions were duly adopted and are in full force and effect as
      of
      the Closing Date;

    


    (ii) A
      copy of
      resolutions duly adopted by Netsmart, authorizing the execution, delivery and
      performance of this Agreement and the Bill of Sale and Assumption Agreement,
      and
      a certificate of the secretary of Netsmart, dated the Closing Date, to the
      effect that such resolutions were duly adopted and are in full force and effect
      as of the Closing Date;

    


    (iii) A
      duly
      executed counterpart of the Bill of Sale and Assumption Agreement; 

    


    (iv) The
      duly
      executed Promissory Note;

    


    (v) A
      certificate of good standing from the Secretary of State of Buyer’s jurisdiction
      of incorporation and from the Secretary of State of the jurisdiction in which
      Buyer maintains its principal place of business; and 

    


    (vi) such
      other and further documents, instruments, certificates and agreements reasonably
      deemed by Sellers’ counsel to be necessary to effectuate the transactions
      contemplated by this Agreement. 

     

    
      
        
        

      

      
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    SECTION
      2.11.  Purchase
      Price Allocation. 

    


    (a) For
      all
      Tax purposes, the Total Purchase Price, increased by the portion of the Assumed
      Liabilities that is treated as consideration for the Transferred Assets for
      federal income tax purposes, shall be allocated to the Transferred Assets in
      accordance with Section 1060 of the Code and the Treasury regulations
      promulgated thereunder (“Price
      Allocation”).
      The
      Price Allocation shall be proposed by Buyer and thereafter agreed to by the
      parties, and each party hereto shall adopt and utilize the Price Allocation
      for
      purposes of all Tax Returns filed by them and shall not voluntarily take any
      position inconsistent with the foregoing in connection with any examination
      of
      any Tax Return, any refund claim, any litigation proceeding or otherwise, except
      that Buyer's cost for the Transferred Assets may differ from the amount so
      allocated to the extent necessary to reflect Buyer's capitalized acquisition
      costs other than the amount realized by Sellers. In the event that the Price
      Allocation is disputed by any Governmental Authority, the party receiving notice
      of the dispute shall promptly notify the other parties hereto of such dispute
      and the parties hereto shall cooperate in good faith in responding to such
      dispute in order to preserve the effectiveness of the Price Allocation.


    


    (b) Each
      party agrees to timely file an IRS Form 8594 reflecting the Price Allocation
      for
      the taxable year that includes the Closing Date and to make any timely filings
      required by Applicable Law.

    


    (c) Any
      indemnification payment by Sellers, including by way of a reduction in amounts
      payable under the Promissory Note, shall be treated as an adjustment to the
      Total Purchase Price paid for the Transferred Assets for tax purposes. Such
      adjustment shall be reflected as an adjustment to the price allocated to a
      specific asset, if any, giving rise to the adjustment. If any such adjustment
      does not relate to a specific asset, such adjustment shall be allocated among
      the Transferred Assets in accordance with the Price Allocation method provided
      in Section 2.11(a) above.

     

    ARTICLE
      3

     

    REPRESENTATIONS
      AND WARRANTIES OF SELLERS

    


    Sellers
      jointly and severally hereby represent and warrant to Buyer as
      follows:

     

    SECTION
      3.1. Organization
      and Qualification. 

    


    Each
      of
      QS and Parent is a corporation duly organized, validly existing and in good
      standing under the laws of the State of Georgia and has all corporate power
      and
      authority to own, lease and operate the Transferred Assets and to carry on
      the
      Business as now being conducted. QS is duly qualified or licensed and in good
      standing in each jurisdiction set forth on Schedule
      3.1,
      which
      is each jurisdiction where the nature of the activities conducted by Business
      or
      the character of the property or assets owned, leased or operated by the
      Business makes such qualification or licensing necessary, except in
      jurisdictions where the failure to be so duly qualified or licensed and in
      good
      standing has not had and would not have a Seller Material Adverse Effect.


     

    SECTION
      3.2. Authority
      Relative to this Agreement. 

    


    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    The
      execution, delivery and performance by Sellers of this Agreement and the
      consummation by Sellers of the transactions contemplated hereby are within
      Sellers’ corporate powers and have been duly authorized by all requisite action
      on the part of each Seller. This Agreement and the Bill of Sale and Assumption
      Agreement have been duly and validly executed and delivered by each Seller
      which
      is a party thereto and each constitutes a legal, valid and binding agreement
      of
      such Seller enforceable against such Seller in accordance with its respective
      terms, except as the enforcement thereof may be subject to, or limited by,
      applicable bankruptcy, insolvency, reorganization, moratorium or other laws
      affecting the enforcement of creditors’ rights generally, and subject to the
      application of equitable principles and the availability of equitable remedies.
      

     

    SECTION
      3.3. Subsidiaries. 

    


    QS
      has no
      Subsidiaries. QS owns no interest, directly or indirectly, and has no commitment
      to purchase any interest, direct or indirect, in any other Person. 

     

    SECTION
      3.4. Financial
      Statements.

    


    (a) Copies
      of
      the income statements for QS for the years ended December 31, 2003, 2004 and
      2005, which are consistent with the income statements included in the
      consolidated financial statements of Parent that have been audited by an
      independent, registered public accounting firm, have been provided to Buyer
      and
      are set forth on Schedule
      3.4(a)
      (together with the Balance Sheet which has been provided to the Buyer, the
      “Financial
      Statements”).
      

    


    (b) The
      Financial Statements (i) are complete, true and correct in all material
      respects, (ii) were prepared in conformity with GAAP applied on a consistent
      basis in accordance with past practice, and (iii) present fairly the financial
      position and results of operations of QS, respectively, as of the dates thereof
      and for the periods then ended as referred to therein. 

    


    (c) Other
      than to the extent disclosed or reserved for in the Balance Sheet, or otherwise
      disclosed in the Seller Disclosure Schedules to this Agreement, QS has no
      Liabilities, commitments or obligations of any nature whatsoever (whether
      accrued, absolute, contingent, known, unknown, asserted, unasserted or
      otherwise, and whether due or to become due) except Liabilities, commitments
      and
      obligations incurred in the Ordinary Course of Business since the Balance Sheet
      Date which do not exceed in the aggregate $25,000. 

    


    (d) The
      books
      of account and other financial records of QS are complete and accurate in all
      material respects and have been maintained in a manner and to an extent
      sufficient to enable the Financial Statements to be prepared in accordance
      with
      GAAP and as represented in (a), (b) and (c) of this Section
      3.4.

     

    SECTION
      3.5. Consents
      and Approvals; No Conflicts or Violations.

    


    (a) No
      filing
      with or notice to and no permit, authorization, consent or approval of any
      Governmental Authority is necessary for the execution and delivery by Sellers
      of
      this Agreement or the Bill of Sale and Assumption Agreement to which such Seller
      is a party or the consummation by Sellers of the transactions contemplated
      hereby or thereby, except for any required consent to the transfer of an Assumed
      Contract which either has been obtained or is listed on Schedule
      3.5(b).
      

    


    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    (b) Neither
      the execution, delivery and performance of this Agreement or the Bill of Sale
      and Assumption Agreement by Sellers nor the consummation by Sellers of the
      transactions contemplated hereby or thereby will (i) conflict with or
      result in any breach of any provision of the Articles of Incorporation and
      By-laws of each Seller, (ii) except as set forth on Schedule
      3.5(b),
      result
      in a violation or breach of or constitute (with or without due notice or lapse
      of time or both) a default (or give rise to any right of termination, amendment,
      cancellation or acceleration or Lien) under any of the terms, conditions or
      provisions of any Contract relating to the Business or the Transferred Assets,
      or (iii) violate any Applicable Law binding on or applicable to a Seller or
      any of the Transferred Assets except, in the case of (ii) or (iii), (A) as
      set
      forth on Schedule
      3.5(b)
      and for
      (B) such other violations, breaches or defaults that do not have and would
      not
      reasonably be likely to have a Seller Material Adverse Effect or adversely
      affect the Sellers’ ability to enter into and perform its obligations under this
      Agreement or the Bill of Sale and Assumption Agreement.

     

    SECTION
      3.6. Litigation. 

    


    There
      is
      no Action pending or, to the Knowledge of Sellers, threatened by or against
      a
      Seller with respect to the Business or relating to any the Transferred Assets
      before any Governmental Authority, in each case, (i) that individually or in
      the
      aggregate, by its existence or by an adverse determination: (A) has or could
      be
      reasonably expected to have a Seller Material Adverse Effect, (B) could prevent,
      hinder or delay the execution and performance of this Agreement or the Bill
      of
      Sale and Assumption Agreement or the consummation of the transactions
      contemplated hereby or thereby, or (C) could result in this Agreement or the
      Bill of Sale and Assumption Agreement being declared unlawful or cause the
      rescission of any of the transactions contemplated hereby or thereby or (ii)
      in
      which the amount of damages asserted in writing exceeds $50,000. 

     

    SECTION
      3.7. Compliance
      with Applicable Law. 

    


    Each
      Seller holds all permits, licenses, variances, exemptions, orders and approvals
      of all Governmental Authorities necessary for the lawful conduct of the Business
      and the use of the Transferred Assets in the same manner and extent to which
      it
      is currently conducted, except where such failures to hold such permits,
      licenses, variances, exemptions, orders and approvals, individually or in the
      aggregate, do not have and are not reasonably likely to have a Seller Material
      Adverse Effect. Sellers have not been charged by any Governmental Authority
      with, or received notice from any Governmental Authority of, any violation
      of
      any Applicable Law relating to it, or the operation of the Business, nor, to
      the
      Knowledge of Sellers, is there any threatened claim of such violation (including
      any investigation) or any reasonably basis therefor. The Business has been
      conducted in compliance with all Applicable Laws, except where noncompliance
      with Applicable Laws, individually or in the aggregate, does not have and is
      not
      reasonably likely to have a Seller Material Adverse Effect. This Section
      3.7
      does not
      address compliance with, or permits, licenses, variances, exemptions, orders
      or
      approvals required under, Environmental Law, which are addressed solely in
      Section
      3.22.

     

    SECTION
      3.8. Labor
      Matters. 

    


    (a) There
      are
      no pending or, to the Knowledge of Sellers, threatened charges, complaints,
      petitions or grievances before any Governmental Authority relating to or
      predicated upon a violation of Applicable Law regarding employment, employment
      practices or terms and conditions of employment, including charges of unfair
      labor practices, unlawful discharge, discrimination, harassment or hostile
      work
      environment with respect to any of the employees of the Business, nor to the
      Knowledge of Sellers, is there any basis for any such charges, complaints,
      petitions or grievances. QS is not a party to any collective bargaining
      agreement or other labor union contract applicable to persons employed by QS
      with respect to the Business. No employee of the Business is employed by Parent.
      No strikes, slowdowns, work stoppages, or lockouts have occurred nor, to the
      Knowledge of Sellers, have there been any threats thereof. 

    


    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    (b) None
      of
      the employees identified on Schedule
      3.8
      has
      given notice to a Seller of his or her intention to resign prior to the Closing
      Date or, to the Knowledge of Sellers, is intending to do so.

     

    SECTION
      3.9. Intellectual
      Property. 

     

    (a) Schedule
      3.9(a)
      lists
      (i) all registered Trademarks, and all pending applications for Trademarks;
      (ii)
      all registered Copyrights, and all pending applications for Copyrights; and
      (iii) all Domain names. Schedule
      3.9(a)
      lists
      all common-law Trademarks owned by a Seller that are material to the Business
      and owned by Sellers. Sellers do not own any Patents or foreign Trademarks
      or
      Copyrights related to the Business. Except for the Intellectual Property
      identified on Schedule
      3.9(a),
      Sellers
      do not own any other Intellectual Property that is material to the Business
      and
      required to be disclosed on Schedule
      3.9(a).
      

    


    (b) Schedule
      3.9(b)
      lists
      all licenses, sublicenses, agreements or instruments involving the Intellectual
      Property (other than licenses granted by Sellers under Customer Contracts and
      agreements signed by QS employees under its standard confidentiality and
      Intellectual Property ownership agreement) including (i) licenses by QS to
      any
      Person of any Intellectual Property, and (ii) licenses by any other Person
      to a
      Seller of any Intellectual Property (except with respect to generally available
      “off-the-shelf” software) (each, a “License”).
      Each
      License set forth on Schedule
      3.9(b)
      is a
      valid and binding agreement, in full force and effect and enforceable against
      the Seller party thereto, and to the Knowledge of Sellers, against the other
      parties thereto in accordance with its terms. With respect to each License,
      there is no default (or event that with the giving of notice or passage of
      time
      would constitute a default) by a Seller, or, to the Knowledge of Sellers, the
      other party thereto. There are no pending, or, to the Knowledge of Sellers,
      threatened claims with respect to any License. True and complete copies of
      all
      Licenses have been made available to the Buyer.

    


    (c) The
      Sellers have good and valid title to, or otherwise possesses the rights to
      use,
      all Intellectual Property necessary for the conduct of the Business in the
      same
      manner as it is being conducted on the Closing Date. Neither the consummation
      of
      the transactions contemplated by this Agreement nor Sellers’ performance
      hereunder will result in the diminution, transfer, termination or forfeiture
      of
      a Seller’s rights in the Intellectual Property or Licenses. Except for
      Intellectual Property owned by third parties and licensed to a Seller pursuant
      to the Licenses, to the Knowledge of Sellers, no Person other than a Seller
      has
      any right or interest of any kind or nature in or with respect to the
      Intellectual Property, or any portion thereof, or any rights to sell, license,
      lease, transfer or use or otherwise exploit the Intellectual Property or any
      portion thereof, except that the customers of QS have licensed Software Products
      from QS in the Ordinary Course of Business. All officers, employees and
      independent contractors of Sellers who have created Intellectual Property have
      executed a binding and enforceable agreement under which all rights, title
      and
      ownership in and to such Intellectual Property have been assigned to a Seller.
      

    


    
      
        
        

      

      
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    (d) No
      Person
      has notified a Seller that it has in the conduct of the Business, infringed
      upon, misappropriated or misused, any intellectual property or proprietary
      information of another Person, and, to the Knowledge of Sellers, each Seller
      in
      the conduct of the Business has not infringed upon, misappropriated or misused,
      any intellectual property or proprietary information of another Person. There
      are no pending or, to the Knowledge of Sellers, threatened claims or proceedings
      in which Sellers’ ownership or use of the Intellectual Property has been or will
      be challenged by another Person. To the Knowledge of Sellers, no Person is
      infringing upon, misappropriating, or otherwise violating Sellers’ rights to the
      Intellectual Property.

    


    (e) The
      Sellers own full and unencumbered right and good, valid and marketable title
      or
      has valid licenses to all Software included in the Products. The Software owned
      by the Sellers is free and clear of all Liens, except Permitted Liens. No Seller
      has incorporated any Intellectual Property owned by another Person into the
      Products or the Software, except as set forth on Schedule
      3.9(e).
      Except
      as set forth on Schedule
      3.9(e),
      no open
      source or public library software, including any version of any software
      licensed pursuant to any GNU public license, is, in whole or in part, embodied
      or incorporated in the Software. Sellers employ commercially reasonable measures
      to ensure that the Software used in connection with the Business contain no
      “viruses” which, for the purposes of this Agreement, means any computer code
      intentionally designed to disrupt, disable or harm in any manner the operation
      of any Software or hardware.

    


    (f) Sellers
      have taken commercially reasonably measures to protect the proprietary nature
      of
      the Intellectual Property and to maintain in confidence all Confidential
      Information. To the Knowledge of Sellers, no Confidential Information of a
      Seller used in connection with the Business has been disclosed to any third
      party, other than pursuant to a non-disclosure or confidentiality agreement
      or
      other conditional obligation intended to protect such Seller’s proprietary
      interests in and to such Confidential Information.

    


    (g) Trademarks:
      (i) All registered Trademarks, and pending applications for Trademarks with
      the
      United States Patent and Trademark Office (“PTO”)
      or any
      other trademark office, are currently in material compliance with all Applicable
      Law (including the filing of affidavits of use and renewal applications as
      applicable), and are not subject to any maintenance fees or Taxes or Actions
      falling due within ninety (90) days after the Closing Date; (ii) No Trademark
      has been or is now involved in any opposition, infringement, dilution, unfair
      competition or cancellation proceeding and, to the Knowledge of Sellers, no
      such
      Action is threatened with respect to any of the Trademarks; (iii) No Trademark
      is alleged to infringe any trade name, trademark or service mark of any other
      Person and, to the Knowledge of Sellers, no Trademark is currently being
      infringed upon by any other Person; (iv) All Products displaying a Trademark
      which has been registered with the PTO bear the proper federal registration
      notice.

    


    (h) The
      Intellectual Property (including, to the Knowledge of Sellers, the Intellectual
      Property licensed to Sellers by third parties), is free and clear of any and
      all
      Liens, except for Permitted Liens. 

    


    (i) To
      the
      Knowledge of Sellers, there has been no breach of security involving any
      websites or information assets of Sellers in connection with the Business.
      All
      data which has been collected, stored, maintained or otherwise used by Sellers
      in connection with the Business has been collected, stored, maintained and
      used
      in accordance with Applicable Law and industry standards, except where such
      noncompliance, individually or in the aggregate, does not have and would not
      reasonably be expected to have a Seller Material Adverse Effect. No Seller
      has
      been notified of noncompliance with Applicable Law regarding protection of
      data
      or industry standards pertaining thereto.

    


    
      
        
        

      

      
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    (j) All
      Contracts for the lease or license of Information Technology or arrangements
      relating to the maintenance and support, security, disaster recovery management
      and utilization (including facilities management and computer bureau services
      agreements) of the Information Technology owned or used by a Seller in the
      conduct of the Business is set forth on Schedule
      3.9(j).
      

    


    (k) Sellers
      either own or have rights to use under valid licenses or leases all Information
      Technology required to carry on the Business as currently conducted, which
      Information Technology has the capacity and performance necessary to fulfill
      its
      current obligations under the Assumed Contracts and the Assumed Warranties.
      

    


    (l) (i)
      All
      Contracts for the lease or license of Information Technology used in connection
      with the Business are legal, valid and binding and enforceable against the
      Seller party thereto, and to the Knowledge of Sellers, against the other parties
      thereto in accordance with their respective terms and are in full force and
      effect, and (ii) with respect to each Contract for the lease or license of
      Information Technology used with the Business, there is no default (or event
      that with the giving of notice or passage of time would constitute a default)
      by
      a Seller, or, to the Knowledge of Sellers, the other party thereto.

    


    SECTION
      3.10.  Brokers. 

    


    No
      broker, finder or investment banker is entitled to any brokerage, finder's
      or
      other fee or commission in connection with the transactions contemplated by
      this
      Agreement based upon arrangements made by or on behalf of Sellers for which
      the
      Buyer would or could be liable.

     

    SECTION
      3.11.  Contracts. 

    


    (a) Schedule
      3.11
      lists
      all Assumed Contracts described in clauses (i) through (xv) below
      that relate to the Business and which have not, as of the date hereof, been
      terminated or fully performed ( together with the Customer Contracts, the
“Material
      Contracts”):
      

    


    (i) any
      Assumed Contracts providing for a commitment of employment or provision of
      services involving the manufacture, design, improvement, sale, promotion,
      distribution, advertising, repair or maintenance and support of the Business,
      the Transferred Assets or Products of the Business;

    


    (ii) any
      Assumed Contracts with any Person containing any provision or covenant
      prohibiting or materially limiting the ability of QS or the Business to engage
      in any business activity or compete with any Person or to solicit any Persons
      as
      customers, employees or independent contractors;

    


    (iii) any
      Assumed Contracts pursuant to which any Lien (other than Permitted Liens) has
      been or could reasonably be expected to be imposed on any Transferred
      Assets;

    


    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    (iv) any
      Assumed Contracts (other than this Agreement) providing for (i) the future
      disposition or acquisition of any of the Transferred Assets, and (ii) any
      merger or other business combination involving the Business;

    


    (v) any
      Assumed Contract which includes express provisions regarding confidentiality
      of
      any information pertaining to, or used in connection with, the Business or
      the
      Transferred Assets;

    


    (vi) any
      Assumed Contract that limits or contains restrictions on the ability of QS
      to
      incur or suffer to exist any Lien, to purchase or sell any assets, to change
      the
      lines of business in which it participates or engages or to engage in any merger
      or other business combination; 

    


    (vii) all
      Assumed Contracts (except for Assumed Contracts related to the sale of goods
      or
      services to customers in the ordinary course of business) that (A) involve
      the payment, pursuant to the terms of any such Assumed Contract, (1) by a Seller
      of more than $10,000 annually or (2) to a Seller of more than $10,000 annually
      and (B) cannot be terminated within ninety (90) days after giving notice of
      termination without resulting in any material cost or penalty to such
      Seller;

    


    (viii) any
      Assumed Contract the particulars of which are required to be furnished to any
      antitrust or regulatory Governmental Authority and any undertaking that has
      been
      given or Order made pursuant to any antitrust legislation or in response to
      any
      request for information or statement of objection from any Governmental
      Authority;

    


    (ix) any
      bid,
      tender, proposal or offer which, if accepted, will result in a Seller becoming
      a
      party to any Assumed Contract in which the aggregate payments to be received
      or
      paid by such Seller would exceed $10,000;

    


    (x) any
      partnership, joint venture or teaming arrangements pertaining to the Business;
      

    


    (xi) any
      Assumed Contract not made in the Ordinary Course of Business; 

    


    (xii) any
      Assumed Contract not otherwise described in any of clauses (i) through (xi)
      above under which the consequences of a default or termination could reasonably
      be expected to have Seller Material Adverse Effect; and 

    


    (xiii) any
      amendment or modification to any of the Assumed Contracts described in this
      Section
      3.11.

    


    (b) Sellers
      have made available for inspection by Buyer true, correct and complete copies
      of
      each Assumed Contract and all amendments thereto and any waivers granted
      thereunder. Except as set forth on Schedule
      3.11(b),
      the
      consummation of the transactions contemplated by this Agreement are not a
      violation of, or grounds for, the modification, termination or cancellation
      of
      any of the Material Contracts or for the imposition of any penalty or Lien
      or
      the default of any security interests thereunder.

    


    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    (c) Except
      as
      set forth on Schedule
      3.11(c),
      all
      Assumed Contracts are valid and binding agreements, in full force and effect
      and
      enforceable against Seller, and to the Knowledge of Seller, against the other
      parties thereto in accordance with their respective terms, except as the
      enforcement thereof may be subject to or limited by bankruptcy, insolvency,
      reorganization, moratorium or other laws affecting the enforcement of creditors’
rights generally now or hereafter in effect and subject to the application
      of
      equitable principles and the availability of equitable remedies, and subject
      to
      the rights of a Governmental Authority to terminate a contract if the
      Governmental Authority has not received the funds necessary to perform the
      contract. There is not, under any Assumed Contract or any obligation, or
      covenant or condition contained therein, any existing default or breach by
      a
      Seller, or to the Knowledge of Sellers, by any other party, or any event,
      condition or act (including the consummation of the transactions contemplated
      by
      this Agreement) which, with the giving of notice, the lapse of time, or the
      happening of any other event or condition, (i) would constitute a default under
      or a breach of any provision of any Material Contract or (ii) would permit
      the
      acceleration of any obligation of any party to any Material Contract or the
      creation of a Lien upon any of the Transferred Assets. No Seller has received
      notice of a dispute under or the pending or threatened cancellation, revocation
      or termination of any Assumed Contract, nor, to the Knowledge of Sellers, are
      there any facts or circumstances which are reasonably likely to lead to any
      such
      cancellation, revocation or termination. Except for the assignment of Contracts
      from QS to Parent, no Seller has assigned, delegated or otherwise transferred
      any of its rights or obligations with respect to any Assumed Contract.


    


    (d) No
      Customer Contract has been totally or partially terminated for default or for
      the convenience of a Governmental Authority. Sellers have not received any
      requests with respect to any Customer Contract for equitable adjustment of
      claims (other than routine invoices). Sellers have not been notified of any
      deductions from unpaid invoices with respect to any Customer Contract.


    


    (e) No
      Seller
      has been suspended or debarred from doing business with any Governmental
      Authority, nor has any such suspension or debarment action been threatened,
      proposed, or commenced. To Sellers’ Knowledge, there is no valid reasonable
      basis, or specific circumstances that with the passage of time would reasonably
      be likely to become a reasonably basis, for such Seller’s suspension or
      debarment from doing business with any Governmental Authority. 

    


    (f) Each
      Seller has complied in all material respects with the material terms and
      conditions of each Customer Contract, including all clauses, provisions and
      requirements (i) incorporated expressly, by reference or by operation of law
      and/or (ii) relating to price adjustments based on pricing made available to
      third Persons. Sellers have, with respect to all Customer Contracts: (x)
      complied in all material respects with all certifications and representations
      it
      has executed, acknowledged or set forth with respect to each such Contract;
      and
      (y) submitted certifications and representations with respect to each such
      Contract that were accurate, current and complete when submitted, and were
      properly updated to the extent required by Applicable Law or the applicable
      Contract.

    


    (g) No
      Seller
      has been nor is it now being audited or investigated by any Governmental
      Authority nor, to the Knowledge of Sellers, has such audit or investigation
      been
      threatened. 

    


    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    (h) Except
      as
      set forth on Schedule
      3.11(c),
      Sellers
      have not received notice of any unfavorable past performance assessments,
      evaluations, or ratings relating to any Customer Contract.

    


    (i) Sellers
      have not failed to pay any compensation required by it with respect to any
      work
      performed or invoiced by them under any Customer Contract.

    


    (j) No
      Seller
      has knowingly or recklessly submitted any inaccurate, untruthful, or misleading
      cost or pricing data, certification, bid, proposal, application, report, claim,
      or any other information relating to a Customer Contract to any Governmental
      Authority.

    


    (k) To
      the
      Knowledge of Sellers, no Customer Contracts are subject to any right of setoff,
      except as provided under Applicable Law. Sellers have not received any notice
      that monies due under any Government Contract are or may be subject to
      withholding or setoff.

    


    (l) To
      the
      Knowledge of Sellers, no employee, agent, consultant, representative of a Seller
      or of the Business is in receipt or possession of any competitor’s confidential,
      proprietary, or procurement sensitive information under circumstances where
      there is reason to believe that such receipt or possession is unlawful or
      unauthorized. Sellers have not received an official investigative inquiry or
      subpoena from any Governmental Authority. 

    


    (m) To
      the
      Knowledge of Sellers, none of Sellers’ officers, directors, or employees, has
      knowingly or recklessly provided to any Person any false or misleading
      information with respect to such Seller or the Business, or in connection with
      the procurement of, performance under, or renewal of, any Customer Contract.
      

    


    (n) To
      the
      Knowledge of Sellers, there exists no valid basis for (i) the withdrawal or
      suspension of any approval or consent of any Governmental Authority with respect
      to any Products designed, developed, manufactured or sold by Sellers, or (ii)
      the recall, withdrawal or suspension by Order of any Governmental Authority
      of
      any such Products. To the Knowledge of Sellers, there are no product or service
      defects which could give rise to any such losses, claims, damages, expenses
      or
      Liabilities. There are no defects in the designs, specifications, or processes
      with respect to any Product designed, developed, manufactured or sold by the
      Business that could give rise to any material Liability.

    


    SECTION
      3.12.  [Intentionally
      Left Blank]. 

     

    SECTION
      3.13.  Title
      to Assets and Continued Operation. 

    


    (a) Upon
      consummation of the transactions contemplated by this Agreement, Sellers will
      have sold, assigned, transferred and conveyed to Buyer, and Buyer will have
      acquired from Sellers, good and marketable title to all of the Transferred
      Assets owned by Sellers, free and clear of all Liens except Permitted Liens.
      

    


    (b) Except
      as
      set forth on Schedule
      3.13(b),
      all of
      the property, assets, and rights included in the Transferred Assets are
      sufficient for Buyer to continue to operate the Business in the same manner
      as
      it is conducted currently and to perform the services of the Business, including
      in accordance with all of the requirements of the Assumed Contracts and Assumed
      Warranties in effect on the Closing Date. 

    


    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

    (c) Maintenance
      contracts are in force for both (i) those of the tangible Transferred Assets
      where it is normal to have them maintained by independent or specialist
      contractors, and (ii) for each asset that a Seller is obliged to maintain or
      repair under a leasing or similar agreement. All of those assets have been
      regularly maintained in accordance with safety regulations required to be
      observed in relation to them and the provisions of any applicable Contract.
      

     

    SECTION
      3.14.  Insurance. 

    


    Immediately
      prior to the Closing, the Transferred Assets were insured under various policies
      of insurance. To the Knowledge of Sellers, there currently is no basis for
      an
      insurance claim under any of such policies. 

    


    SECTION
      3.15.  Equipment;
      Asset Valuation. 

    


    The
      Equipment is in good operating condition, ordinary wear and tear excepted,
      and
      is capable immediately after the Closing Date of being used for the purposes
      for
      which such Equipment is now being used in and in connection with the Business.
      As of the Closing Balance Sheet Date, the value of the Equipment, furniture
      and
      fixtures and other current assets to be reflected on the Closing Balance Sheet
      will total approximately $200,000.

     

    SECTION
      3.16.  Absence
      of Changes. 

    


    Since
      the
      Balance Sheet Date, the Business has been conducted in the Ordinary Course
      of
      Business consistent with past practices and there has not been:

     

    (a) any
      sale,
      lease, transfer, or assignment of any of the tangible or intangible assets,
      other than sales of services or Licenses of Intellectual Property of QS made
      in
      the Ordinary Course of the Business and the transfer of the Transferred Assets
      from QS to Parent; 

    


    (b) any
      Contract entered into other than in the Ordinary Course of the
      Business;

    


    (c) any
      acceleration, termination, modification, or cancellation of any
      Contract;

    


    (d) any
      Lien
      other than a Permitted Lien created or imposed upon any of the Transferred
      Assets;

    


    (e) any
      cancellation, compromise, waiver, or release of any right or claim (or series
      of
      related rights and claims) included as Transferred Assets;

    


    (f) any
      material damage, destruction, or loss (whether or not covered by insurance)
      to
      the property of the Business, including the Transferred Assets;

    


    (g) any
      payment of any amount to any Person outside the Ordinary Course of the Business
      with respect to any Liability (excluding any costs and expenses incurred or
      which may be incurred in connection with this Agreement and the transactions
      contemplated hereby) which would constitute an Assumed Liability if in existence
      as of the Closing;

    


    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

    (h) any
      change by QS in its accounting principles, methods or practices or in the manner
      it keeps its books and records or any change by QS of current practices with
      regard to sales, expenses, assets and Liabilities;

    


    (i) any
      change in the practices of pricing or discounting for sales of products or
      services, ordering supplies, delivering products or services, accepting returns
      or honoring warranties, invoicing customers and collecting debts;

    


    (j) any
      deliveries or performance of services by a Seller in connection with any backlog
      of orders other than in the Ordinary Course of Business or as otherwise provided
      under the terms of any Assumed Contract with respect to such backlog;


    


    (k) any
      threat or notification, orally or in writing, by one or more of the
      distributors, customers or suppliers of the Business who, individually or in
      the
      aggregate, are material to the Business, of an intention to terminate or
      materially alter their respective business relationships or any Assumed
      Contract, nor has any such termination or material alteration of such
      relationships or any Assumed Contract occurred; 

    


    (l) any
      Contract by a Seller with respect to any of the foregoing.

     

    SECTION
      3.17.  Product
      Warranties, Defects and Liabilities. 

    


    There
      exists no pending or,
      to the
      Knowledge of Sellers, threatened
      action, suit, inquiry, proceeding or investigation by or before any Governmental
      Authority relating to any product alleged to have been distributed or sold
      by QS
      to others, and alleged to have been defective or improperly designed or in
      breach of any express or implied product warranty and, to the Knowledge of
      Sellers, there exists no latent defect in the design or manufacture of any
      of
      the Products of the Business. There exists no pending or,
      to
the
      Knowledge of Sellers,
      threatened
      product liability or warranty claims relating to the Business outside the
      Ordinary Course of Business, and to Knowledge of Sellers, there is no basis
      for
      any such suit, inquiry, action, proceeding, investigation or claim. Since
      January 1, 2003, there have not been any product liability or warranty claims
      that have resulted in a Seller Material Adverse Effect. Schedule
      3.17
      includes
      copies of the Customer Contracts containing the standard terms and conditions
      of
      sale of the products and services of the Business, except to the extent set
      forth therein. There are no express or implied product or service warranties
      relating to the Products or Business, except as may be set forth in the Assumed
      Contracts or the standard terms and conditions of sale of the products and
      services of the Business as set forth on Schedule
      3.17.

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    SECTION
      3.18.  Affiliate
      Transactions. 

    


    Except
      for the transfer of the assets noted in Section
      3.16(a)
      or as
      set forth on Schedule
      3.18,
      as of
      the Closing Date, QS
      is not
      a
      party to, or bound by, any Contract with any of its Affiliates, and no Affiliate
      of a Seller owns or otherwise has any rights to or interests in any asset,
      tangible or intangible, which is a Transferred Asset. 

     

    SECTION
      3.19.  Customers
      and Suppliers 

    


    (a) Schedule
      3.19(a)
      sets
      forth a complete and accurate list (with dollar volumes included) of (i) the
      customers (by dollar volume) of the Products or services of QS invoiced during
      the twelve-month period immediately preceding the Balance Sheet Date; and (ii)
      any supplier of materials or services (by dollar amount) to whom QS paid at
      least $500 during the twelve-month period immediately preceding the Balance
      Sheet Date. 

    


    (b) Except
      as
      set forth on Schedule
      3.19(b),
      there
      are no Contracts under the terms of which (i) QS or, in connection with the
      Business, Parent is obligated to purchase any product or services from, or
      sell
      any product or services to, any other Person on an exclusive basis with respect
      to any geographic area or group of potential customers; or (ii) any other Person
      may be similarly obligated to QS. 

     

    SECTION
      3.20.  Illegal
      Payments.

    


    Neither
      Sellers nor any of their respective directors, officers, employees or agents,
      has (a) directly or indirectly given or agreed to give any illegal gift,
      contribution, payment or similar benefit to any supplier, customer, governmental
      official, employee or other Person to assist in connection with any actual
      or
      proposed transaction or made or agreed to make any illegal contribution, or
      reimbursed any illegal political gift or contribution made by any other Person,
      to any candidate for federal, state, local or foreign public office (i) which
      violates any Applicable Law, including but not limited to, the Foreign Corrupt
      Practices Act of 1977, as amended, or could subject Buyer to any Damages or
      penalties in any civil, criminal or governmental litigation or proceeding or
      (ii) the non-continuation of which has had or might reasonably be expected
      to
      have a Seller Material Adverse Effect or (b) established or maintained any
      unrecorded fund or asset or made any false entries on any books or records
      for
      any purpose.

     

    SECTION
      3.21.  Real
      Property

    


    (a) Seller
      does not own any real property.

    


    (b) Schedule
      3.21(b)
      contains
      a list of all real property leased or subleased by a Seller that is being used
      by, or occupied in connection with the Business (“Leased
      Real Property”).
      Sellers have delivered to Buyer correct and complete copies of the leases and
      subleases set forth on Schedule
      3.21(b),
      which
      leases and subleases have not been amended or modified since the amendments
      furnished. With respect to each lease and sublease set forth on Schedule
      3.21(b):
      

    


    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    (i) all
      of
      the terms and conditions of each lease or sublease have been observed or
      performed in all material respects by the Seller party thereto and no party
      to
      any such lease or sublease is in breach or default, and, to the Knowledge of
      Sellers, no event has occurred which, with notice or lapse of time or both,
      would constitute a breach or default or permit termination, modification, or
      acceleration hereunder, or would allow the lessor or sublessor to assert a
      right
      of possession to impose any Lien against any of the Transferred Assets, except
      that the lease listed on Schedule
      3.21(b)
      requires
      the tenant to give the landlord 20 days notice in connection with a transfer
      of
      the lease pursuant to a sale of business;

    


    (ii) the
      lease
      or sublease will continue to be legal, valid, binding, in full force and effect
      and enforceable on identical terms following the consummation of the
      transactions contemplated hereby, subject to the requirement to provide notice
      of change of ownership and compliance with the equity requirement for Buyer
      as
      set forth in the lease; and

    


    (iii) the
      facilities leased or subleased are supplied with utilities and other services
      necessary for the operation of the Business as it is conducted on the Closing
      Date. 

    


    SECTION
      3.22.  Environmental
      Compliance.

    


    (a) All
      of
      the Transferred Assets, the Leased Real Property and the Business are in
      material compliance with all Environmental Laws; 

    


    (b) There
      are
      no pending or, to the Knowledge of Sellers, threatened Actions arising out
      of or
      related to any Environmental Laws against QS or, in connection with the
      Business, Parent or any lessor or sublessor of the Leased Real Property;


    


    (c) Sellers
      currently maintain all permits required under Environmental Law for the
      operation of the Business (the “Environmental
      Permits”),
      and
      Sellers are in material compliance with the Environmental Permits and there
      are
      no legal proceedings pending nor, to the Knowledge of Sellers, threatened to
      revoke the Environmental Permits; 

    


    (d) As
      a
      result of its operation of the Business, Sellers are not subject to any
      outstanding Order or a party to any agreement with any Governmental Authority
      pertaining to Environmental Law or which requires any Remedial Action to be
      performed; and

    


    (e) There
      are
      no Actions by any employee of a Seller pending, or to the Knowledge of Sellers,
      threatened, based on alleged injury to such employee’s health caused by exposure
      to any Hazardous Substance at any Leased Real Property or in connection with
      the
      operation of the Business. 

    


    SECTION
      3.23.  Tax
      Matters. 

    


    (a) Sellers
      have filed all Tax Returns with respect to the Business which they are required
      to file under Applicable Law and the Code as of the date hereof and all such
      Tax
      Returns are complete and correct, are based on the books of account and
      financial records of QS, and have been prepared in material compliance
      with all Applicable Laws.

    


    (b) Sellers
      have paid all Taxes with respect to the Business due and owing by it as of
      the
      date hereof (whether or not such Taxes are required to be or are shown on a
      Tax
      Return) and has withheld and paid over to the appropriate Governmental Authority
      all Taxes which it is required to withhold from amounts paid or owing to any
      employee, shareholder, creditor or other third party. There are no unpaid Taxes
      with respect to any period or portion thereof ending on or before the Closing
      Date that are or could become a Lien on the Transferred Assets except for
      current Taxes not yet due and payable.

    


    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

    (c) Sellers
      have not waived any statute of limitations with respect to any Taxes or agreed
      to any extension of time with respect to any Tax assessment or deficiency with
      respect to the Business.

    


    (d) Since
      the
      Balance Sheet Date, Sellers have not incurred any Liability for Taxes with
      respect to the Business other than in the Ordinary Course of
      Business.

    


    (e) No
      foreign, federal, state or local tax audits or administrative or judicial
      proceedings are pending or being conducted with respect to Sellers and the
      Business.

    


    (f) Seller
      have not received from any Governmental Authority any written notice indicating
      an intent to open an audit or conduct any other review with respect to the
      Business.

    


    (g) To
      Sellers’ Knowledge there is no basis for any Governmental Authority to assess
      any additional Taxes with respect to the Business for any period for which
      Tax
      Returns have been filed. There is no dispute, audit, investigation, proceeding
      or claim concerning any Liability with respect to Taxes of Sellers in connection
      with the Business either (i) claimed or raised by any Governmental Authority
      in
      writing or (ii) to the Knowledge of Sellers, threatened, based upon any
      communications with such Governmental Authority. Sellers are not a party to
      any
      Action by any Governmental Authority relating to Taxes resulting from the
      operation of the Business, nor to the Knowledge of Sellers, is there any basis
      for the same which could result in a Liability to Buyer. 

    


    SECTION
      3.24.  Employee
      Benefit Plans.

    


    (a) Schedule
      3.24
      sets
      forth each pension, retirement, profit-sharing, deferred compensation, bonus
      or
      other incentive plan or other employee benefit program, arrangement, agreement
      or understanding, or medical, vision, dental or other health plan, or life
      insurance or disability plan, or any other employee benefit plan, whether or
      not
      terminated and whether or not funded, including, without limitation, any
“employee benefit plan” as defined in Section 3(3) of ERISA to which QS
      currently contributes or is a party (“Employee
      Benefit Plans”).
      For
      purposes of this Agreement an “ERISA
      Affiliate”
of
      QS
      means any corporation or unincorporated trade or business (including, without
      limitation, any partnership, limited liability company or sole proprietorship)
      that, together with QS, is considered a single employer within the meaning
      of
      Code Section 414(b), (c), (m), (n) or (o). None of the Employee Benefit Plans
      is, and QS does not otherwise have any liability with respect to, including,
      without limitation, actual or potential liability due to an ERISA Affiliate’s
      sponsorship of, or contributions to, any Employee Benefit Plan, (i) an employee
      benefit plan that is subjected to Title IV of ERISA or is otherwise subject
      to
      the minimum funding requirements of ERISA or the Code; (ii) a multiemployer
      plan
      as defined in Section 3(37) of ERISA; or (iii) an employee benefit plan that
      provides health, life, disability or other welfare-type benefits to current
      or
      future retirees or current or future former employees except as required by
      COBRA or applicable state continuation coverage law. Sellers have made available
      to Buyer true, correct, and complete copies of all Employee Benefit Plans and
      all amendments thereto. Each Employee Benefit Plan (other than any multiemployer
      plan) has been maintained, administered and funded in compliance in all material
      respects with all Applicable Laws including, without limitation, ERISA and
      the
      Code. There are no claims, suits, investigations or audits pending or, to the
      Knowledge of Sellers, threatened, with respect to any of the Employee Benefit
      Plans (other than routine benefit claims); nor to the Knowledge of Sellers
      is
      there any reasonable basis for any of the foregoing. No Employee Benefit Plan
      has any material unfunded liabilities. 

    


    
      
        
        

      

      
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    (b) QS
      has
      agreed to pay or award to certain of its employees bonuses, equity incentives
      and other payments which are earned in accordance with the plan as set forth
      on
Schedule
      3.24(b)
      (the
“Incentive Payments”). Sellers have no other commitments to pay or award
      bonuses, equity incentives or other similar payments to QS employees other
      than
      the Incentive Payments.

    


    


    ARTICLE
      4

    REPRESENTATIONS
      AND WARRANTIES OF BUYER

    


    Buyer
      and
      Netsmart jointly and severally hereby represent and warrant to Sellers as
      follows:

     

    SECTION
      4.1. Organization.

    


    Each
      of
      Netsmart and Buyer is duly organized, validly existing and in good standing
      under the laws of its jurisdiction of incorporation and has all requisite power
      and authority to own, lease and operate its properties and to carry on its
      businesses as now being conducted. Buyer is duly qualified or licensed and
      in
      good standing to do business in each jurisdiction in which the property owned,
      leased or operated by it or the nature of the business conducted by it makes
      such qualification or licensing necessary, except in such jurisdictions where
      the failure to be so duly qualified or licensed and in good standing would
      not
      have a Buyer Material Adverse Effect (as defined below). The term “Buyer
      Material Adverse Effect” means
      any
      circumstance, change or effect that, individually or when taken together with
      all other such circumstances, changes or effects, is materially adverse to
      the
      business, operations or financial condition of Buyer and Netsmart taken as
      a
      whole or would materially impair the ability of Buyer to consummate the
      transactions contemplated hereby.

     

    SECTION
      4.2. Authority
      Relative to this Agreement. 

    


    Each
      of
      Netsmart and Buyer has all necessary corporate power and authority to execute
      and deliver this Agreement and to consummate the transactions contemplated
      hereby. The execution and delivery of this Agreement and the consummation of
      the
      transactions contemplated hereby have been duly and validly authorized by the
      board of directors of each of Netsmart and Buyer and no other corporate
      proceedings on the part of Netsmart or Buyer are necessary to authorize this
      Agreement or to consummate the transactions contemplated hereby. This Agreement
      has been duly and validly executed and delivered by Netsmart and Buyer and
      constitutes a valid, legal and binding agreement of Netsmart and Buyer
      enforceable against Netsmart and Buyer in accordance with its
      terms.

     

    SECTION
      4.3. Consents
      and Approvals: No Violations.

    


    (a) No
      filing
      with or notice to, and no permit, authorization, consent or approval of, any
      Governmental Authority is necessary for the execution and delivery by Netsmart
      or Buyer of this Agreement or the consummation by Netsmart or Buyer of the
      transactions contemplated hereby, except where the failure to obtain such
      permits, authorizations, consents or approvals or to make such filings or give
      such notice would not have a Buyer Material Adverse Effect.

    


    
      
        
        

      

      
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    (b) Neither
      the execution, delivery and performance of this Agreement by Netsmart or Buyer
      nor the consummation by Netsmart or Buyer of the transactions contemplated
      hereby will (i) conflict with or result in any breach of any provision of
      the Certificate of Incorporation or Bylaws of Netsmart or Buyer,
      (ii) result in a violation or breach of or constitute (with or without due
      notice or lapse of time or both) a default (or give rise to any right of
      termination, amendment, cancellation or acceleration or Lien) under any of
      the
      terms conditions or provisions of any contract to which Netsmart or Buyer is
      a
      party or by which Netsmart or Buyer or any of its properties or assets may
      be
      bound or (iii) violate any Applicable Law binding on or applicable to
      Netsmart or Buyer or any of its properties or assets except, in the case of
      (ii)
      or (iii), for violations, breaches or defaults which would not have a Buyer
      Material Adverse Effect.

    


    (c) Neither
      the execution and delivery of the Promissory Note and the timely performance
      of
      Netsmart’s obligations thereunder, nor the full and timely performance of
      Netsmart’s and Buyer’s obligations with respect to the Earn-Out Payments,
      results or will result in a violation or breach of or constitutes or will
      constitute (with or without due notice or lapse of time or both) a default
      (or
      give rise to any right of termination, amendment, cancellation or acceleration
      or Lien) under any of the terms conditions or provisions of any material
      contract to which Netsmart or Buyer is a party or by which Netsmart or Buyer
      or
      any of its properties or assets may be bound.

     

    SECTION
      4.4. Litigation. 

    


    There
      are
      no Actions pending or, to Buyer's or Netsmart’s knowledge, threatened that
      question the validity of this Agreement or the Bill of Sale and Assumption
      Agreement or any action to be taken by Netsmart or Buyer in connection with
      this
      Agreement or the Bill of Sale and Assumption Agreement or by their existence
      or
      if adversely determined, have or would have a Buyer Material Adverse
      Effect.

     

    SECTION
      4.5. Brokers. 

    


    Except
      for a consultant retained by Buyer, no broker, finder or investment banker
      is
      entitled to any brokerage, finders or other fee or commission from Netsmart
      or
      Buyer in connection with the transactions contemplated by this Agreement based
      upon arrangements made by or on behalf of Buyer or any of its
      Affiliates.

     

    SECTION
      4.6. Netsmart
      SEC Reports. 

    


    Netsmart
      has filed with the Securities and Exchange Commission all forms, reports and
      other documents (“SEC
      Reports”)
      required to be filed under the Securities Exchange Act of 1934; all SEC Reports
      were prepared in accordance with the requirements of that Act in all material
      respects; and none of the SEC Reports at the time it was 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 made the statements therein,
      in
      the light of the circumstances under which they were made, not
      misleading.

    


    


    
      
        
        

      

      
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    ARTICLE
      5

    COVENANTS

     

    SECTION
      5.1. Additional
      Agreements; Best Efforts. 

    


    Subject
      to the terms and conditions herein provided, each of the parties hereto agrees
      to use its best efforts to take or cause to be taken all action and to do or
      cause to be done all things reasonably necessary, proper or advisable under
      Applicable Law to consummate and make effective the transactions contemplated
      by
      this Agreement and the Bill of Sale and Assumption Agreement, including, without
      limitation, contesting any legal proceeding challenging the transactions
      contemplated hereby or thereby, and executing any additional instruments
      necessary to consummate the transactions contemplated hereby and thereby,
      including the execution of an additional Bill of Sale and Assumption Agreement
      to the extent necessary to reflect any adjustment in the amount of Assumed
      Liabilities in accordance with Section
      2.3(e)
      hereof.
      If at any time after the Closing Date any further action is reasonably necessary
      to carry out the purposes of this Agreement or the Bill of Sale and Assumption
      Agreement the proper officers and directors of each party hereto shall take
      all
      such necessary action. After the Closing Date Buyer shall allow Parent access
      to
      the Continuing Employees, at reasonable times and upon reasonable notice, to
      allow Parent to collect information it requires to prepare and file any reports,
      returns or other documents it is required to file under applicable law,
      including but not limited to Tax Returns and reports filed with the Securities
      and Exchange Commission.

     

    SECTION
      5.2. Public
      Announcements. 

    


    The
      parties shall consult with each other before issuing any press releases or
      otherwise making any public statements with respect to this Agreement or the
      transactions contemplated hereby, and none of the parties shall issue any press
      release or make any public statement prior to obtaining the other parties'
      written approval, which approval shall not be unreasonably withheld, except
      that
      no such approval shall be necessary to the extent disclosure may be required
      by
      Applicable Law or any NASDAQ or AMEX rule applicable to the party required
      to
      make such disclosure. 

     

    SECTION
      5.3. Employee
      Benefits.

    


    (a) Offer
      of Employment.
      The
      parties hereto intend that there shall be continuity of employment with respect
      to the employees of the Business set forth on Schedule
      5.3(a).
      To that
      end, effective at the beginning of the Business Day on the Closing Date, Buyer
      shall offer to employ the employees on Schedule
      5.3(a)
      at a
      rate of base and commission compensation not less than that in effect on the
      Closing Date, as disclosed in Schedule
      5.3(a).
      Each
      individual who accepts Buyer’s offer of employment and becomes an employee of
      Buyer on the Closing Date shall thereafter be a continuing employee (a
“Continuing
      Employee”).
      Buyer
      shall employ the Continuing Employees in substantially the same position held
      by
      them prior to the Closing and on terms and conditions that are, to the extent
      consistent with Netsmart’s existing employment terms, conditions and policies,
      comparable to those enjoyed by similarly-situated Netsmart employees either
      prior to or after the Closing, whichever is more favorable to the Continuing
      Employees (except that the first sentence of this Section 5.3(a) shall control
      Buyer’s obligations concerning base and commission compensation); and Buyer will
      recognize the service of the Continuing Employees with Sellers for purposes
      of
      eligibility for all benefits, including but not limited to vacation benefits.
      As
      of the Closing Date, Continuing Employees who were covered under Seller’s 401(k)
      plan shall be eligible to participate in Buyer’s 401(k) plan without regard to
      any service requirements thereunder. Buyer’s 401(k) plan will recognize the
      service of the Continuing Employees with Sellers for purposes of eligibility
      to
      participate, vesting and early retirement eligibility under Buyer’s 401(k) plan.


    


    
      
        
        

      

      
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    (b) Welfare
      Plans - Claims Incurred; Pre-Existing Conditions.
      As of
      the Closing Date, the Buyer shall commence coverage of the Continuing Employees
      under any life insurance and disability plans, programs and arrangements that
      Netsmart then provides to its other employees on the same terms and conditions
      as are made available to Netsmart’s employees generally. As of the day following
      the Closing, Buyer or Netsmart shall commence coverage of Continuing Employees
      under any medical, hospitalization and dental programs or arrangements that
      Netsmart then provides to its other employees similarly situated, and, to the
      extent permitted by such programs and consistent with Netsmart’s policies,
      waive, as applicable, any preexisting condition, exclusion or limitation. Seller
      shall retain all liability for claims incurred prior to the Closing Date under
      its employee benefit plans and programs, including its medical, hospitalization
      and dental plans. Buyer and Netsmart shall assume all liability for claims
      incurred on or after the Closing Date under the employee benefit plans and
      programs covering Continuing Employees, including medical, hospitalization
      and
      dental plans. For purposes of this Section
      5.3(b),
      a claim
      is deemed incurred when the services that are the subject of the claim are
      performed; in the case of life insurance, when the death occurs; in the case
      of
      long-term disability benefits, when the disability occurs; and, in the case
      of a
      hospital stay, when the employee first enters the hospital.

    


    (c) On
      or
      before the thirtieth day after the Final EBIT-A Amount has been determined
      under
      Section 2.9, Sellers shall pay to former QS employees, whether or not such
      employees are Continuing Employees, the Incentive Payments, if any, to which
      they are entitled. 

     

    SECTION
      5.4. Expenses. 

    


    Each
      of
      the parties shall bear its own expenses incurred in connection with this
      Agreement and the transactions contemplated hereby and in connection with all
      obligations required to be performed by such party under this
      Agreement.

     

    SECTION
      5.5. Certain
      Other Covenants 

     

    If,
      following the Closing, it is necessary that Buyer or Seller obtain additional
      information relating to the Business prior to the Closing Date in order to
      properly prepare documents or reports required to be filed with Governmental
      Authorities or financial statements or other business purpose, and such
      information is within the other party's possession, Buyer or Seller, as
      applicable, will (at the requesting party's sole reasonable cost and expense)
      furnish or cause its representatives to furnish such information to the other
      party. Such information shall include, without limitation, the accounting and
      tax records of Seller and all agreements between Seller and any Person relating
      to the Business. 

     

    SECTION
      5.6. Earn-Out
      Payments.

    


    (a) Calculation
      and Payment of Maintenance Earn-Out Payment.
      

    


    
      
        
        

      

      
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    (i) On
      or
      before the thirtieth day following the preparation of audited financial
      statements for the fiscal year ending December 31, 2007, but no later than
      April
      30, 2008, Buyer shall calculate and disclose in writing to Sellers (A) the
      amount of Maintenance Revenue during the Maintenance Earn-Out Period and (B)
      the
      amount of the earn-out payment payable to the Sellers in accordance with
Schedule
      5.6(a)
      (the
“Maintenance
      Earn-Out Payment”).
      

    


    (ii) Buyer
      shall pay to Sellers the Maintenance Earn-Out Payment no later than the fifth
      (5th)
      Business Day after the Earn-Out Statement shall become final under Section
      5.6(e)
      (the
“Earn-Out
      Payment Date”).
      Sellers
      shall be entitled to receive interest on such Earn-Out Payment from February
      1,
      2008 through the Earn-Out Payment Date, at the Prime Rate, payable on the
      Earn-Out Payment Date.

    


    (b) Calculation
      and Payment of Software Earn-Out Payments.
      

    


    (i) On
      or
      before the thirtieth day following the preparation of audited financial
      statements for the fiscal year ending December 31, 2007, but no later than
      April
      30, 2008, Buyer shall calculate and disclose in writing to Sellers (A) the
      amount of Vital Records Contract Awards during the Software Earn-Out Period
      and
      (B) the amount of the earn-out payment payable to Sellers in accordance with
      Schedule
      5.6(b)(i)
      (the
“Vital
      Records Earn-Out Payment”).
      

    


    (ii) On
      or
      before the thirtieth day following the preparation of audited financial
      statements for the fiscal year ending December 31, 2007, but no later than
      April
      30, 2008, Buyer shall calculate and disclose in writing to Sellers (A) the
      amount of Other Software Contract Awards during the Software Earn-Out Period
      and
      (B) the amount of the earn-out payment payable to Sellers in accordance with
      Schedule
      5.6(b)(ii)
      (the
“Other
      Software Earn-Out Payment”).
      

    


    (iii) At
      Buyer’s option, the Vital Records Earn-Out Payment and the Other Software
      Earn-Out Payment may be paid in (i) cash in immediately available funds or
      (ii)
      if at the time of the Vital Records Earn-Out Payment and Other Software Earn-Out
      Payment, the NTST Common Stock is listed for trading on a national securities
      exchange or traded on the NASDAQ Stock Market, in NTST Common Stock by
      delivering to Sellers duly and validly issued certificates representing a number
      of shares of NTST Common Stock computed as follows: an amount equal to (A)
      the
      amount of Vital Records Earn-Out Payment or Other Software Earn-Out Payment
      that
      Buyer wishes to pay in NTST Common Stock divided by (B) the volume weighted
      average trading price (as reported in writing by UBS Paine Webber to each of
      Sellers and Buyer) of one share of NTST Common Stock traded on NASDAQ for the
      four trading weeks ending on the 2nd
      trading
      day immediately before the Earn-Out Payment Date. 

    


    (iv) In
      the
      event that Buyer elects to make any portion of the Vital Records Earn-Out
      Payment or Other Software Earn-Out Payment in NTST Common Stock, Netsmart hereby
      agrees that not later than the Earn-Out Payment Date it shall file a
      registration statement, at its sole expense, with respect to such shares of
      NTST
      Common Stock to allow Sellers to begin selling such shares of NTST Common Stock
      in open-market and private transactions as soon as possible after the Earn-Out
      Payment Date. Netsmart shall use its best efforts to cause such registration
      statement to be declared effective as soon as possible after filing, and shall
      maintain the effectiveness of such registration statement until such time as
      all
      of such shares of NTST Common Stock have either been sold pursuant to such
      registration statement or become available for sale within a three-month period
      under Securities and Exchange Commission Rule 144.

    


    
      
        
        

      

      
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    (v) Buyer
      shall pay to Sellers the Vital Records Earn-Out Payment and the Other Software
      Earn-Out Payment no later than the fifth (5th)
      Business Day after the Earn-Out Statement shall become final under Section
      5.6(e)
      (the
“Earn-Out
      Payment Date”).
      Sellers
      shall be entitled to receive interest on such Earn-Out Payment from February
      1,
      2008 through the Earn-Out Payment Date, at the Prime Rate, payable on the
      Earn-Out Payment Date.

    


    (c) Good
      Faith.
      All
      parties shall act in good faith with respect to the covenants set forth in
      this
Section
      5.6.
      Buyer
      and Netsmart acknowledge that the inclusion of the Earn-Out Payments is a
      principal term hereof and the opportunity to achieve such Earn-Out Payments
      constitutes a material consideration for Sellers’ willingness to enter this
      Agreement.

    


    (d) Operation
      of Business.
      During
      the Software Earn-Out Period and the Maintenance Earn-Out Period, neither Buyer
      nor Netsmart will take any action or inaction with respect to the Business
      with
      the intent of increasing the Liability Adjustment determined under Section
      2.3,
      or of
      reducing the Earnings Period Revenue Amount or the Earnings Period EBIT-A Amount
      determined under Section
      2.9,
      or of
      reducing the amount of any Earn-Out Payment determined under this Section
      5.6.
      In
      particular, without limiting the generality of the preceding sentence, during
      the Software Earn-Out Period and the Maintenance Earn-Out Period, Buyer
      shall:

    


    (i) provide
      adequate resources to the Business to enable the Business to capitalize on
      opportunities presented to it;

    


    (ii) use
      best
      efforts to operate the Business in a manner consistent with QS’ past practice,
      including preserving intact the Business and maintaining the Business’
relationships with customers and suppliers;

    


    (iii) operate
      the Business as a stand-alone subsidiary of Netsmart;

    


    (iv) maintain
      separate financial statements of the Business in accordance with GAAP
      consistently applied with QS’ practices as of the Closing Date;

    


    (v) not
      defer
      sales of the Business; 

    


    (vi) not
      materially reduce the overall size of the sales force of the
      Business;

    


    (vii) through
      December 31, 2006 maintain the current commission plan structure, including
      the
      Continuing Employees who are currently covered by that plan, then thereafter
      maintain a commission plan structure sufficient to provide similar incentives
      to
      the Continuing Employees; and

    


    
      
        
        

      

      
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    (viii) not
      prevent the Business from competing with the other operations of Netsmart and
      its Affiliates.

    


    Notwithstanding
      the foregoing, the Sellers acknowledge and agree that Netsmart shall have the
      right to review and approve all proposals and quotations to be made by Buyer,
      in
      order to insure that Buyer continues to run the Business in a profitable
      manner.

    


    (d) Written
      Statements.
      Each
      disclosure of an Earn-Out Payment under Sections
      5.6(b)(i)
      and
5.6(b)(ii)
      shall be
      accompanied by a written statement, signed by the President and CFO of Buyer
      and
      the CFO of Netsmart, which details the manner in which such Earn-Out Payment
      was
      calculated (each, an “Earn-Out
      Statement”).
      Buyer
      shall afford to Sellers and their representatives reasonable access, on
      reasonable notice, for a period of thirty (30) days after the date an Earn-Out
      Statement is delivered to Sellers (the “Review
      Period”),
      to
      review the books and records of the Business that were used to prepare the
      Earn-Out Statement, meet with key employees of Buyer and the Business, and
      review any pertinent work papers of Buyer’s or Netsmart’s independent auditors.
      Sellers shall have an additional fifteen (15) days after the expiration of
      the
      Review Period to furnish Buyer with a written notice (the “Dispute
      Notice”)
      setting forth those items with which it disagrees and the reasons for each
      such
      disagreement. If during the Review Period either of the Sellers notifies Buyer
      in writing that Sellers accept the Earn-Out Statement, or if both Sellers fail
      to furnish the Dispute Notice to Buyer within the fifteen-day period, the
      Earn-Out Statement shall become final for all purposes. If one of the Sellers
      furnishes the Dispute Notice to Buyer within the fifteen-day period, the parties
      shall use best efforts to resolve any disagreements timely raised in the Dispute
      Notice, after which resolution the Earn-Out Statement shall become final for
      all
      purposes. 

    


    (e) Earn-Out
      Period Information.
      During
      the Software Earn-Out Period and the Maintenance Earn-Out Period, within 45
      days
      after the end of each calendar quarter, Buyer shall provide Sellers in writing
      with the following reports on the progress of the Business during such
      quarter:

    


    (i) Quarterly
      income or profit-and-loss information to the extent and in the form maintained
      by Buyer and Netsmart for purposes of consolidating Netsmart’s quarterly
      results;

    


    (ii) Maintenance
      Revenue during such quarter (if during the Maintenance Earn-Out
      Period);

    


    (iii) Other
      Software Contract Awards made during such quarter;

    


    (iv) Vital
      Records Contract Awards made during such quarter;

    


    (v) Termination
      of Contracts with Identified Customers during such quarter; and

    


    (vi) Any
      event
      during such quarter that has had a material and adverse impact on the Business
      generally or an Earn-Out Payment specifically.

     

    SECTION
      5.7. Name
      Change of Seller.

    


    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

    On
      the
      Closing Date, Sellers shall deliver to Buyer for filing with the appropriate
      Governmental Authority such documents as may be required to amend the
      certificate of incorporation, bylaws and other organizational documents of
      QS to
      change the name of QS and exclude any reference therein to “QS Technologies”
alone or in combination with any other words or terms, or any variation of
      such
      words or terms. On and after the Closing Date, QS shall cease doing business
      under or utilizing as a trademark, trade name, or service mark, any of the
      foregoing names.

     

    SECTION
      5.8. Business
      Confidentiality; Non-Disparagement. 

    


    (a) Sellers
      acknowledges that they have had access to, and use of, Confidential Information
      of the Business prior to the Closing. Sellers covenant that without written
      authorization from Buyer, or except as contemplated herein with respect to
      compliance with record-keeping and reporting requirements, they shall not at
      any
      time hereafter, directly or indirectly, use for their own purpose or for the
      benefit of any Person other than Buyer, any Confidential Information, or
      disclose any Confidential Information to any Person. This covenant shall not
      apply to any Confidential Information that is or becomes generally available
      to
      the public or in the industry other than as a result of a disclosure directly
      or
      indirectly by a Seller in violation of this Agreement or is or becomes available
      to a Seller in a lawful manner and on a non-confidential basis from a source
      other than Buyer.

    


    (b) Nothing
      herein shall prevent any disclosure required by Applicable Law or any Order
      of a
      Governmental Authority; provided, however, that Sellers shall give the Buyer
      prompt notice of any request for such disclosure that it receives and, at
      Buyer’s cost, shall provide reasonable cooperation to Buyer in connection with
      Buyer’s efforts to obtain a protective order or other means of preventing
      disclosure and otherwise protecting the confidentiality of the Confidential
      Information. 

    


    (c) To
      the
      extent that the same may be appropriate, Buyer shall be entitled to seek
      injunctive relief (without the necessity of posting a bond) from any court
      of
      competent jurisdiction to restrain any threatened or further violation of the
      covenant contained in this Section
      5.8
      in
      addition to any other rights or remedies at law, in equity or under this
      Agreement to which the Buyer may be entitled.

     

    SECTION
      5.9. Accounts
      Receivable.

    


    (a) Buyer
      shall forward to Sellers any and all payments received by it in respect of
      Receivables for goods delivered or services rendered prior to the Closing Date,
      to the extent reflected on the Closing Balance Sheet. Buyer may, but shall
      have
      no obligation to, assist Sellers in the collection of the Receivables and agrees
      that Sellers shall be entitled to use all lawful methods to collect the
      Receivables from the obligors thereof. Buyer agrees that it will take no action,
      directly or through any other Person, that is intended to induce, or has the
      reasonably-expected result of inducing, the obligors of such Receivables not
      to
      make the requisite payments to QS. 

    


    (b) With
      respect to the unbilled receivables listed on Schedule
      5.9(b),
      Buyer
      shall (i) use its best efforts to complete the formal documentation of the
      contracts related thereto as soon as possible, (ii) perform all such contracts
      fully in accordance with their respective terms, (iii) invoice the customers
      under those contracts as soon as possible consistent with prior QS practices,
      (iv) use its best efforts to collect the amounts due under such invoices as
      soon
      as possible, and (v) immediately deliver to Sellers any amounts received by
      Buyer under those contracts, in the form received by Buyer.

     

    
      
        
        

      

      
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    SECTION
      5.10. Netsmart
      Obligations.  

    


    (a) Notwithstanding
      anything else herein, in each instance in which Buyer is obligated perform
      any
      obligation hereunder Netsmart agrees to cause Buyer so to perform, and Netsmart
      unconditionally guarantees Buyer’s full and timely performance of each of its
      obligations hereunder; and all written or other communications from Netsmart
      to
      either Seller with respect to Buyer or the Business shall be deemed to be
      communications from and on behalf of Buyer.

    


    (b) QS
      has
      caused the issuance of a performance bond in connection with its performance
      of
      its contract with the State of Nebraska, which performance bond has been
      collateralized by a letter of credit of Parent’s bank and guaranteed by QS and
      Parent. While such performance bond is in effect Netsmart shall take no action
      or inaction with the intent, or that would have the reasonably-foreseeable
      result, of extending the term of the performance bond; and at such time as
      performance under such contract has been completed, Netsmart shall cooperate
      with Sellers in connection with their efforts to have that performance bond
      cancelled and released. To the extent either Seller suffers a Loss solely due
      to
      Buyer’s failure fully to perform under such contract with the State of Nebraska
      or under this Section
      5.10(b),
      Sellers’ indemnification rights under Section
      8.4
      shall
      not be subject to the Sellers’ Basket notwithstanding anything to the contrary
      in Article
      8.

    


    ARTICLE
      6

    TAX
      MATTERS

     

    SECTION
      6.1. Taxes. 

    


    Seller
      shall
      pay all transfer Taxes resulting from the transactions contemplated by this
      Agreement.

    


    SECTION
      6.2. Cooperation. 

    


    Buyer
      and
      Sellers shall reasonably cooperate, and shall cause their respective Affiliates,
      officers, employees, agents, auditors and representatives reasonably to
      cooperate, in preparing and filing all returns, reports and forms relating
      to
      Taxes, including maintaining and making available to each other all records
      necessary in connection with Taxes and in resolving all disputes and audits
      with
      respect to all Taxable periods relating to Taxes. Each of Buyer and Sellers
      recognizes that Buyer and Sellers may need access, from time to time, after
      the
      Closing Date, to certain accounting and Tax records and information held by
      Sellers or Buyer, respectively, to the extent such records and information
      pertain to events occurring prior to the Closing Date; therefore, Sellers and
      Buyer each agree, (a) to properly retain and maintain such records for a
      period of six (6) years commencing as of the date hereof and (b) to allow
      the other party and its agents and representatives, at times and dates mutually
      acceptable to the parties, to inspect, review and make copies of such records
      as
      such party or its representatives may deem necessary or appropriate from time
      to
      time, such activities to be conducted during normal business hours and at the
      expense of the requesting party. Each party agrees to maintain in accordance
      with Section
      5.8
      the
      confidentiality of all information of the other party disclosed pursuant to
      this
Section
      6.2,
      except
      to the extent it is required to disclose the same pursuant to Applicable Law
      or
      the directive of a Governmental Authority.

     

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

    SECTION
      6.3. Allocation
      of Taxes. 

    


    All
      personal property taxes and similar ad
      valorem obligations
      levied with respect to the Transferred Assets for a taxable period that includes
      (but does not end on) the Closing Date shall be apportioned between Sellers
      and
      Buyer as of the Closing Date based on the number of days of such taxable period
      included in the period on and prior to the Closing Date (“Pre-Closing
      Tax Period”)
      and
      the number of days of such taxable period included in the period commencing
      after the Closing Date (the “Post-Closing
      Tax Period”).
      Sellers shall be liable for the proportionate amount of such Taxes that is
      attributable to the Pre-Closing Tax Period, and Buyer shall be liable for the
      proportionate amount of such Taxes that is attributable to the Post-Closing
      Tax
      Period. Within a reasonable period after the Closing, Sellers and Buyer shall
      present a statement to the other setting forth the amount of reimbursement
      to
      which each is entitled under this Section 6.3,
      together with such supporting evidence as is reasonably necessary to calculate
      the proration amount. The proration amount shall be paid by the party owing
      it
      to the other within ten (10) days after delivery of such statement. Thereafter,
      Sellers shall notify Buyer upon receipt of any bill for personal property taxes
      relating to the Transferred Assets, part or all of which are attributable to
      the
      Post-Closing Tax Period, and shall promptly deliver such bill to Buyer, and
      Buyer shall pay the same to the appropriate taxing authority; provided,
      however,
      that if
      such bill covers any part of the Pre-Closing Tax Period, Sellers shall also
      remit to Buyer prior to the due date of assessment payment for the proportionate
      amount of such bill that is attributable to the Pre-Closing Tax Period. In
      the
      event that Sellers or Buyer shall thereafter make a payment for which it is
      entitled to reimbursement under this Section 6.3,
      the
      other party shall make such reimbursement promptly, but in no event later than
      thirty (30) days after the presentation of a statement setting forth the amount
      of reimbursement to which the presenting party is entitled along with such
      supporting evidence as is reasonably necessary to calculate the amount of
      reimbursement. Any payment required under this Section 6.3
      and not
      made within ten (10) days after delivery of the statement shall bear interest
      at
      the rate per annum determined, from time to time, under the provisions of
      Section 6621(a)(2) of the Code for each day until paid.

    
 

    ARTICLE
      7

    NON-COMPETITION;
      NON-SOLICITATION

     

    SECTION
      7.1. Non-Competition. 

    


    Commencing
      on the Closing Date and continuing until the third anniversary of the Closing
      Date, Sellers shall not, and shall cause each of their Affiliates not to,
      directly or indirectly, manufacture, sell, provide or offer to sell any Products
      or services set forth on Schedule
      A
      which
      the Business currently manufactures, sells, licenses or provides or is in the
      process of developing or has manufactured, sold, licensed or provided during
      the
      three (3) year period immediately preceding the Closing (any such activity,
      a
“Competitive
      Business”);
      provided, however, Buyer and Netsmart acknowledge that Parent, either directly
      or through Affiliates, regularly makes loans to, invests in and manages other
      businesses, and nothing herein shall prohibit Parent or any of its Affiliates
      from engaging in such activities with respect to any business that is not
      primarily engaged in selling public health software products; provided, further,
      that in the event any such business is engaged in selling public health software
      products to any extent, such investment shall be a passive investment.


     

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

    SECTION
      7.2. Non-Solicitation.

    


    (a) From
      and
      after the Closing Date, Sellers shall not, and shall cause each of their
      Subsidiaries not to, directly or indirectly, on its account or for any other
      Person, interfere with the employment by Buyer of any of the Continuing
      Employees while such Continuing Employee is under contract with Buyer;
provided,
      however,
      that if
      the Buyer shall terminate the employment of a Continuing Employee, or if the
      Continuing Employee shall quit such employment, and Sellers have not interfered
      with such employment in violation of this Section
      7.2(a),
      Seller
      and its Subsidiary shall be entitled to solicit for hire, and/or hire such
      employee three months following such termination.

    


    (b) Subject
      to Sellers’ rights under Section
      5.9,
      commencing on the Closing Date Sellers shall not, and shall cause each of their
      Subsidiaries not to, intentionally interfere with the relationship the Buyer
      has
      with any of the suppliers and customers of the Business. 

     

    SECTION
      7.3. Injunctive
      Relief.

    


    (a) Sellers
      and Buyer each acknowledge that the covenants contained in this Article
      7
      were a
      material and necessary inducement for Buyer to agree to the transactions
      contemplated herein and that a violation of any of the covenants contained
      therein could cause irreparable and continuing harm for which Buyer has no
      adequate remedy at law. Accordingly, as and to the extent the same may be
      appropriate, the Buyer shall be entitled to seek injunctive or other equitable
      relief from any court of competent jurisdiction to restrain any threatened
      or
      further violation of such covenants, such injunctive relief to be cumulative
      and
      in addition to any other rights or remedies to which Buyer may be entitled.
      Seller waives posting by Buyer of any bond necessary to secure such injunction
      or other equitable relief.

     

    SECTION
      7.4. Severability.

    


    If
      any
      provision contained in this Article
      7
      is for
      any reason held invalid, illegal or unenforceable in any respect, such
      invalidity, illegality or unenforceability will not affect any other provisions
      of such Section or Article, but such Section and Article will be construed
      as if
      such invalid, illegal or unenforceable provision had never been contained
      therein. It is the intention of the parties that if any of the restrictions
      or
      covenants contained herein is held to cover a geographical area or to be for
      a
      length of time which is not permitted by Applicable Law, or is construed to
      be
      too broad or to any extent invalid, such provision will not be deemed to be
      null, void and of no effect, but to the extent such provision would be valid
      or
      enforceable under Applicable Law, a court of competent jurisdiction will be
      entitled to construe and interpret or reform this Article
      7
      to
      provide for a covenant having the maximum enforceable geographical area, time
      period and other provisions (not greater than those contained herein) as will
      be
      valid and enforceable under such Applicable Law. 

     

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

    ARTICLE
      8

    SURVIVAL
      OF REPRESENTATIONS & WARRANTIES;INDEMNIFICATION

     

    SECTION
      8.1. Survival
      of Representations and Warranties. 

    


    Except
      as
      expressly provided in this Agreement, all representations and warranties made
      hereunder or pursuant hereto or in connection with the transactions contemplated
      hereby shall not terminate, but shall survive the Closing and continue in effect
      until two (2) years following the Closing Date; provided,
      however,
      that
      representations and warranties under Section
      3.13
      (as to
      title) shall remain in effect without limitation, and under Section
      3.9
      (Intellectual Property) and Section
      3.22
      (Environmental Compliance) shall remain in effect until three (3) years
      following the Closing Date and Section
      3.23
      (Taxes)
      shall remain in effect until six (6) years following the Closing Date; and
      further provided, that any such representation or warranty as to which a claim
      shall have been asserted during such survival period shall continue in effect
      until such time as such claim shall have been resolved or settled.

    


    SECTION
      8.2. Survival
      of Covenants and Agreements. 

    


    Except
      as
      expressly provided in this Agreement, all covenants and agreements made
      hereunder or pursuant hereto or in connection with the transactions contemplated
      hereby shall not terminate but shall survive the Closing. 

    


    SECTION
      8.3. Indemnification
      by Sellers. 

    


    Sellers
      shall indemnify and hold harmless Buyer and its Affiliates and their respective
      officers, directors, successors and assigns (the “Buyer
      Indemnified Parties”)
      from
      and against any Liabilities, Damages, Actions, Orders and costs and expenses,
      including reasonable attorney’s and expert fees (any one such item being herein
      called a “Loss”
and
      all
      such items being herein collectively called “Losses”),
      which
      are caused by or arise out of:

    


    (a) any
      breach or default in the performance by Sellers of any covenant or agreement
      of
      Sellers contained herein or in any agreement delivered pursuant hereto at the
      Closing; 

    


    (b) any
      breach of warranty or representation made by Sellers contained in Article 3
      of
      this Agreement or in any certificate delivered pursuant hereto at the Closing;
      

    


    (c) any
      Excluded Liabilities; or

    


    (d) enforcement
      of this Section
      8.3.

    


    Indemnification
      by Sellers shall be realized in the following manner and order of priority:
      (A)
      by the Buyer withholding any amounts owing to Seller under the Promissory Note,
      in the manner provided in Section
      9.12;
      (B) by
      the Buyer withholding all or a portion, as required, of the Earn-Out Payments;
      (C) by the Buyer withholding any other amounts owing to Seller hereunder; and
      (D) by Seller’s delivery of cash to Buyer to the extent that Buyer is not fully
      indemnified by the recourse afforded it under (A) through (C)
      above.

     

    SECTION
      8.4. Indemnification
      by Buyer. 

    


    
      
        
        

      

      
        42

        
          

        

      

      
        
        

      

    

    Buyer
      and
      Netsmart shall indemnify and hold harmless Sellers and their Affiliates and
      their respective officers, directors, successors and assigns (“Seller
      Indemnified Parties”)
      from
      and against any Losses which are caused by or arise out of:

    


    (a) any
      breach or default in the performance by Buyer of any covenant or agreement
      contained herein or in any certificate delivered pursuant hereto or thereto
      or
      at the Closing; 

    


    (b) any
      breach of warranty or representation made by Buyer contained in Article 4 or
      in
      any certificate delivered pursuant hereto at the Closing; 

    


    (c) the
      Assumed Liabilities; 

    


    (d) Buyer’s
      conduct of the Business or the operation and use of the Transferred Assets,
      in
      each case from and after the Closing; or

    


    (e) enforcement
      of this Section
      8.4.
      

     

    SECTION
      8.5. Thresholds
      and Limits on Indemnification.

     

    (a) Threshold
      Liability of Sellers.
      Sellers
      shall not have any obligation to indemnify Buyer or its Affiliates under
Section
      8.3
      until
      the aggregate Losses suffered by Buyer and its Affiliates for which
      indemnification would otherwise be due under Section
      8.3
      exceed
      Thirty-Five Thousand Dollars ($35,000) (the “Buyer’s
      Basket”),
      after
      which the Buyer shall be entitled to recover all of its Losses, including the
      amount of the Buyer’s Basket. 

     

    (b) Threshold
      Liability of Buyer.
      Buyer
      shall not have any obligation to indemnify Sellers or their Affiliates under
      Section
      8.4
      until
      the aggregate Losses suffered by Sellers and its Affiliates for which
      indemnification would otherwise be due under Section
      8.4 exceed
      Thirty-Five Thousand Dollars ($35,000) (the “Sellers’
      Basket”),
      after
      which the Seller shall be entitled to recover all of its Losses, including
      the
      amount of the Sellers’ Basket; provided, however, to the extent either Seller
      suffers a Loss due to Netsmart’s failure to fully and timely perform the
      Promissory Note, or due to Netsmart’s or Buyer’s failure to fully and timely
      perform its respective obligations with respect to the Earn-Out Payments,
      Sellers’ indemnification rights under Section
      8.4
      shall
      not be subject to the Sellers’ Basket. 

     

    (c) Maximum
      Liability of Seller.
      Sellers
      shall not be obligated to indemnify Buyer and its Affiliates for any Losses
      in
      an aggregate amount that exceeds the amount of the Total Purchase Price actually
      received by Sellers; provided, however, Sellers shall not be deemed to have
      received any Assumed Liabilities to the extent Buyer’s performance thereof
      either (i) does not require any cash payment by Buyer, or (ii) requires the
      payment of costs and expenses that are offset by related Revenue. 

     

    (d) Maximum
      Liability of Buyer.
      Buyer
      shall not be obligated to indemnify Seller and its Affiliates for any Losses
      in
      an aggregate amount that exceeds the amount of the Total Purchase Price actually
      received by Sellers; provided, however, Sellers shall not be deemed to have
      received any Assumed Liabilities to the extent Buyer’s performance thereof
      either (i) does not require any cash payment by Buyer, or (ii) requires the
      payment of costs and expenses that are offset by related Revenue. 

     

    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    

    SECTION
      8.6. Procedure;
      Notice of Claims. 

    


    (a) Upon
      the
      occurrence of any event that any of the Buyer Indemnified Parties or Seller
      Indemnified Parties (each, an “Indemnified
      Party”)
      asserts to be the basis for a claim for indemnification against Sellers or
      Buyer
      (as applicable, the “Indemnifying
      Party”)
      under
      this Article 8 (a “Claim”),
      then
      the Indemnified Party shall give notice (a “Claim
      Notice”)
      to the
      Indemnifying Party thereof in writing, which Claim Notice shall set forth (i)
      a
      particular description of the event or condition that is the basis for the
      Claim; and (ii) the amount reasonably necessary to satisfy such Claim;
provided,
      however,
      that
      where the claim involves a Third Party Claim (as hereinafter defined), the
      Indemnified Party shall promptly notify the Indemnifying Party thereof and
      provided further that no delay on the part of the Indemnified Party in notifying
      the Indemnifying Party in such case shall relieve the Indemnifying Party from
      any obligation under this Agreement except to the extent the Indemnifying Party
      is actually prejudiced thereby.

    


    (b) If
      the
      Claim involves the claim of any third person (a “Third-Party
      Claim”),
      the
      Indemnifying Party shall have the right to assume and control the defense of
      the
      Third-Party Claim with counsel of its own choice reasonably satisfactory to
      the
      Indemnified Party, so long as the Indemnifying Party notifies the Indemnified
      Party of such defense in writing within thirty (30) days after the Indemnified
      Party has given notice of the Third-Party Claim and the Indemnifying Party
      conducts the defense of the Third-Party Claim actively and diligently;
provided,
      however,
      that
      the Indemnified Party may retain separate co-counsel at its sole cost and
      expense and participate in the defense of the Third-Party Claim.

    


    (c) In
      the
      case that the Indemnifying Party has assumed and is conducting the defense
      of
      the Third-Party Claim in accordance with Section
      8.6(b):
      (i) the Indemnifying Party shall not consent to the entry of any judgment
      or enter into any settlement with respect to the Third-Party Claim without
      the
      prior written consent of the Indemnified Party (not to be unreasonably withheld,
      delayed or conditioned), unless the judgment or proposed settlement involves
      only the payment of money damages by the Indemnifying Party and does not impose
      an injunction or other equitable relief upon the Indemnified Party, and
      (ii) the Indemnified Party shall not consent to the entry of any judgment
      or enter into any settlement with respect to the Third-Party Claim without
      the
      prior written consent of the Indemnifying Party (not to be unreasonably
      withheld, delayed or conditioned).

    


    (d) In
      the
      event the Indemnifying Party does not assume and conduct the defense of the
      Third-Party Claim in accordance with Section
      8.6(b),
      the
      Indemnified Party may defend against, and consent to the entry of any judgment
      or enter into any settlement with respect to, the Third-Party Claim in any
      manner it reasonably may deem appropriate (and the Indemnified Party need not
      consult with or obtain any consent from the Indemnifying Party in connection
      therewith).

    


    (e) Whenever
      the Indemnified Party shall have given a Claim Notice to the Indemnifying Party
      that does not involve a Third-Party Claim and if the Indemnifying Party disputes
      such Claim, the Indemnified
      Party and the Indemnifying Party shall
      first attempt to resolve the Claim through a good faith discussion of the Claim
      for a period of thirty (30) days (the “Negotiation
      Period”).
      If
      such discussion does not result in a resolution acceptable to either the
      Indemnified Party or the Indemnifying Party, then at the end of the Negotiation
      Period either party may resort to any remedies available in law or in equity
      in
      a court of competent jurisdiction, subject to any other terms of this Agreement
      concerning a party’s pursuit of such remedies.

     

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

    SECTION
      8.7. Remedies. 

    


    Except
      as
      otherwise specifically provided in this Agreement, the sole and exclusive remedy
      of the parties hereunder shall be restricted to the indemnification rights
      set
      forth in this Article 8; provided,
      however,
      that no
      party hereto shall be deemed to have waived any rights, claims, causes of action
      or remedies if and to the extent such rights, claims, causes of action or
      remedies may not be waived under Applicable Law, or in the event of actual
      fraud. 

     

    SECTION
      8.8. Certain
      Limitations.

    


    (a) Notwithstanding
      any other provision in this Agreement to the contrary, the parties to this
      Agreement shall only be liable to indemnify each other for compensatory damages,
      and, accordingly, in the absence of actual fraud, neither party shall be
      entitled to recover from the other special, indirect, punitive or consequential
      damages pursuant to this Article 8 unless, and then only to the extent that,
      the
      same are components of a Third Party Claim for which an Indemnified Party is
      seeking indemnification hereunder. 

    


    (b) The
      amount of any Losses recoverable by way of indemnification pursuant to Article
      8
      shall be calculated net of any indemnification or contribution actually received
      from any third Person. 

    


    (c) It
      is
      agreed that for the purpose of making a claim for indemnification, the
      expiration of any one survival period, as set forth in Section
      8.1,
      of
      certain representations and warranties shall not affect the ability to make
      any
      claim for indemnification hereunder under any other representations and
      warranties still surviving; provided,
      however,
      that no
      party shall be entitled to make a claim for indemnification more than once
      on
      account of the same facts or circumstances.

    


    


    ARTICLE
      9

    MISCELLANEOUS

     

    SECTION
      9.1. Entire
      Agreement; Assignment; Amendments and Waivers. 

    


    (a) This
      Agreement (including the Seller Disclosure Schedules), the Exhibits and the
      Bill
      of Sale and Assumption Agreement constitute the entire agreement between the
      parties hereto with respect to the subject matter hereof and thereof and
      supersede all other prior agreements and understandings both written and oral
      between the parties with respect to the subject matter hereof and thereof.
      No
      representation, warranty, promise, inducement or statement of intention has
      been
      made by any party that is not embodied in this Agreement or such other
      documents, and none of the parties shall be bound by, or be liable for, any
      alleged representation, warranty, promise, inducement or statement of intention
      not embodied herein or therein.

    


    (b) This
      Agreement may not be assigned by operation of law or otherwise without the
      written consent of the other party; provided, however,
      that
      Buyer may assign all of its rights and obligations under this Agreement to
      any
      Affiliate, but such assignment will not relieve Buyer or Netsmart of any of
      its
      covenants or obligations set forth in this Agreement.

    


    
      
        
        

      

      
        45

        
          

        

      

      
        
        

      

    

    (c) This
      Agreement may not be amended or modified, and any of the terms, covenants,
      representations, warranties, or conditions hereof may not be waived, except
      by a
      written instrument executed by all of the parties hereto, or in the case of
      a
      waiver, by the party waiving compliance. Any waiver by any party of any
      condition, or of the breach of any provision, term, covenant, representation,
      or
      warranty contained in this Agreement, in any one or more instances, shall not
      be
      deemed to be nor construed as a further or continuing waiver of any such
      condition, or of the breach of any other provision, term, covenant,
      representation, or warranty of this Agreement.

     

    SECTION
      9.2. Validity. 

    


    If
      any
      provision of this Agreement or the application thereof to any Person or
      circumstance is held invalid or unenforceable, then the remainder of this
      Agreement and the application of such provision to other Persons or
      circumstances shall not be affected thereby and, to such end, the provisions
      of
      this Agreement are agreed to be severable.

     

    SECTION
      9.3. Notices.

    


    All
      notices, requests, claims, demands and other communications hereunder shall
      be
      in writing and shall be given (and shall be deemed to have been duly given
      upon
      receipt) by delivery in person, by facsimile or by registered or certified
      mail
      (postage prepaid, return receipt requested) to each other party as
      follows:

    


    
      	
            	if
              to Buyer:	
              Netsmart
                Technologies, Inc. 

              
                3500
                  Sunrise Highway

                Great
                  River, New York 11739

                Telecopier:
                  

                Attention:
                  James Conway, CEO 

              

            


    

     

    


    
      	
            	with
              a copy to:	
              Kramer,
                Coleman, Wactlar & Lieberman, P.C. 

              
                100
                  Jericho Quadrangle

                Jericho,
                  New York 11753

                Telecopier:
                  (516) 822-4824

                Attention:
                  Nancy D. Lieberman, Esq.

              

            


    

     

    


    
      	
            	if
              to Sellers: 	
              QS
                Technologies, Inc.

              
                c/o
                  Intelligent Systems Corporation

                4355
                  Shackleford Rd.

                Norcross,
                  GA 30093

                Telecopier:
                  (770) 381-2808

                Attention:
                  CEO

              

            


      	 	 	 


      	 	 	
              Intelligent
                Systems Corporation

              4355
                Shackleford Rd.

              Norcross,
                GA 30093

              Telecopier:
                (770) 381-2808

              Attention:
                CEO

            


    

    


    
      
        
        

      

      
        46

        
          

        

      

      
        
        

      

    

    


     

    
      	 	with a copy to:	Sutherland Asbill & Brennan
              LLP


      	 	 	
              999
                Peachtree Street NE

            


    

    
      	 	 	
              Atlanta,
                GA 30309

            


    

    
      	 	 	
              Telecopier:
                (404) 853-8806

            


      	 	 	Attention: Phil Moïse 


    

     

    


    or
      to
      such other address as the person to whom notice is given may have previously
      furnished to the others in writing in the manner set forth above.

     

    SECTION
      9.4. Governing
      Law, Forum Selection, Jurisdiction. 

    


    This
      Agreement shall be governed by, and construed in accordance with, the laws
      of
      the State of Georgia. 

     

    SECTION
      9.5. WAIVER
      OF JURY TRIAL. 

    


    TO
      THE
      EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH CANNOT BE WAIVED, EACH OF THE
      PARTIES HERETO HEREBY WAIVES AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER
      AS
      PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN RESPECT OF
      ANY
      ISSUE OR ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT OR ANY RELATED
      AGREEMENT OR THE SUBJECT MATTER HEREOF, OR THEREOF OR IN ANY WAY CONNECTED
      WITH
      OR RELATED OR INCIDENTAL TO THE TRANSACTIONS CONTEMPLATED HEREBY, IN EACH CASE
      WHETHER NOW EXISTING OR HEREAFTER ARISING. ANY PARTY HERETO MAY FILE AN ORIGINAL
      COUNTERPART OR A COPY OF THIS SECTION 9.5 WITH ANY COURT AS WRITTEN EVIDENCE
      OF
      THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY
      JURY.

     

    SECTION
      9.6. Descriptive
      Headings. 

    


    The
      descriptive headings herein are inserted for convenience of reference only
      and
      are not intended to be part of or to affect the meaning or interpretation of
      this Agreement.

    


    SECTION
      9.7. Parties
      in Interest. 

    


    This
      Agreement shall be binding upon and inure solely to the benefit of each party
      hereto and its successors and permitted assigns and nothing in this Agreement
      express or implied is intended to or shall confer upon any other Person any
      rights, benefits or remedies of any nature whatsoever under or by reason of
      this
      Agreement.

     

    SECTION
      9.8. Specific
      Performance. 

    


    The
      parties hereby acknowledge and agree that the failure of any party to perform
      its agreements and covenants hereunder, including its failure to take all
      actions as are necessary on its part to the consummation of the transactions
      contemplated hereby, will cause irreparable injury to the other parties, for
      which damages, even if available, will not be an adequate remedy. Accordingly,
      each party hereby consents to the issuance of injunctive relief by any court
      of
      competent jurisdiction to compel performance of such party's obligations and
      to
      the granting by any court of the remedy of specific performance of its
      obligations hereunder (without the requirement of posting a bond).

     

    
      
        
        

      

      
        47

        
          

        

      

      
        
        

      

    

    SECTION
      9.9. Disclosure
      Generally. 

    


    Information
      contained in this Agreement or disclosed in any Schedule shall not be deemed
      to
      be included in any other Schedule except to the extent that such disclosure
      is
      specifically referenced or identified or otherwise reasonably applicable to
      such
      other Schedule. 

     

    SECTION
      9.10. Counterparts 

    


    This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed to be an original but all of which shall constitute one and the same
      agreement.

     

    SECTION
      9.11. Attorney’s
      Fees.

    


    If
      any
      party hereto initiates any legal action arising out of or in connection with
      this Agreement or the Bill of Sale and Assumption Agreement, the prevailing
      party shall be entitled to recover from the other party all reasonable
      attorneys’ fees, expert witness fees and expenses incurred by the prevailing
      party in connection therewith. 

     

    SECTION
      9.12. Set-Off
      or Withholding From Promissory Note.

    


    If
      Buyer
      becomes entitled to a set-off against the Promissory Note under Section
      2.3
      or
Section
      2.9(d),
      or
      becomes entitled to withhold any amount from the Promissory Note under
Section
      8.3,
      the
      original principal amount of the Promissory Note shall be reduced by the amount
      to be set-off or withheld, the monthly installments shall be recalculated based
      on the reduced principal amount, and all monthly payments of principal and
      interest previously received by Parent under the Promissory Note shall be
      applied to such recalculated monthly installments in the order in which they
      become due.

    


    [signature
      page follows]

     

    
      
        
        

      

      
        48

        
          

        

      

      
        
        

      

    


    IN
      WITNESS WHEREOF, each of the parties has caused this Agreement to be duly
      executed on its behalf as of the day and year first above written.

     

    


    
      	 	 	 
	 	QS
              TECHNOLOGIES, INC.
	 
 	 
 	 
 
	 	By:  	/s/Kevin
              W. Davidson
	 	
              
Name:
              Kevin W. Davidson
	 	Title:
              President




    
      	 	 	 
	 	INTELLGENT
              SYSTEMS CORPORATION
	 
 	 
 	 
 
	 	By:  	/s/J.
              Leland Strange
	 	
              
Name:
              J. Leland Strange
	 	Title:
              Chief Executive Officer




    
      	 	 	 
	 	NETSMART
              TECHNOLOGIES, INC.
	 
 	 
 	 
 
	 	By:  	/s/Anthony
              F. Grisanti
	 	
              
Name:
              Anthony F. Grisanti
	 	Title:
              Chief Financial Officer




    
      	 	 	 
	 	NETSMART
              PUBLIC HEALTH, INC.
	 
 	 
 	 
 
	 	By:  	/s/Anthony
              F. Grisanti
	 	
              
Name:
              Anthony F. Grisanti
	 	Title:
              Secretary and Treasurer


    

     

    
      
        
        

      

      
        49

        
          

        

      

      
        
        

      

    

    
      Exhibit
        A

       

    

    
      PROMISSORY
        NOTE

       

      
        	$1,435,000 	
                As
                  of July 31,
                  2006

              


      

               

      


      FOR
        VALUE
        RECEIVED, the undersigned, NETSMART TECHNOLOGIES, INC. (the “Company”)
        promises to pay to the order of INTELLIGENT SYSTEMS CORPORATION, its successors,
        endorsees and assigns (“Payee”),
        in
        lawful money of the United States, at 4355 Shackleford Road, Norcross, Georgia
        30093, or such other place as Payee may from time to time designate, the
        principal sum of ONE MILLION FOUR HUNDRED THIRTY-FIVE THOUSAND ($1,435,000)
        DOLLARS, which principal amount shall bear interest at the rate of eight
        and
        one-quarter percent (8.25%)and be fully amortized in equal monthly installments
        over a 36-month period. 

      


      The
        Company shall make payments of $45,133.37 in the aggregate, consisting of
        such
        portion of the principal sum and accrued interest thereon as is set forth
        in the
        attached amortization schedule. Each such payment of principal and accrued
        interest shall be paid on the first business day of each month, commencing
        September 1, 2006, or if such day is not a business day, on the next succeeding
        business day. For the purposes of this Note, “business day” shall mean a day
        other than a Saturday, Sunday or other day on which commercial banks in New
        York, New York are closed due to a federal holiday.

      


      The
        holder of this Note shall have the right to declare the entire unpaid balance
        of
        this Note immediately due and payable in the event 

      


      (a) the
        Company fails to make any payment of principal and interest due hereunder
        within
        ten (10) business days of its due date; or

      


      (b) the
        Company makes a general assignment for the benefit of creditors or commences
        any
        proceeding under any bankruptcy reorganization, arrangement, insolvency,
        readjustment of debt, dissolution or liquidation law of any jurisdiction,
        or any
        such proceeding is commenced against the Company and such proceeding is not
        dismissed within sixty (60) days.

      


      In
        the
        event this Note shall at any time after maturity or default be placed with
        an
        attorney for collection, the Company agrees to pay, in addition to the entire
        remaining principal balance and accrued interest, (i) interest on such amounts
        at the rate of 11% per annum and (ii) all costs of collection, including
        reasonable attorneys’ fees. This Note is subject to prepayment in whole or in
        part without premium or penalty.

      


      The
        Company hereby waives presentment, demand, notice of payment, protest and
        notice
        of protest.

      


       

      


      
        	 	 	 
	 	NETSMART
                TECHNOLOGIES, INC.
	 
 	 
 	 
 
	
              	By:  	 
	 	
                
Anthony
                F. Grisanti
	 	Chief
                Financial Officer


      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

        Exhibit
          A

         

      

      Amortization
        Schedule

      


      
        	
                8/1/2006

              	 	
                 

              	
                 

              	
                 

              	
                Asset
                  Purchase Agmt. Loan

              
	
                Start
                  of Period

              	
                Annual
                  Interest Rate

              	
                Scheduled
                  Balance

              	
                Actual
                  Balance

              	
                Scheduled
                  Payment

              	
                Interest
                  Portion

              	
                Principal
                  Portion

              


      

       

      
        	
                09/06

              	
                8.25%

              	
                1,435,000.00
                  

              	
                1,435,000.00
                  

              	
                (45,133.37)

              	
                (9,865.63)

              	
                (35,267.74)

              
	
                10/06

              	
                8.25%

              	
                1,399,732.26
                  

              	
                1,399,732.26
                  

              	
                (45,133.37)

              	
                (9,623.16)

              	
                (35,510.21)

              
	
                11/06

              	
                8.25%

              	
                1,364,222.05
                  

              	
                1,364,222.05
                  

              	
                (45,133.37)

              	
                (9,379.03)

              	
                (35,754.34)

              
	
                12/06

              	
                8.25%

              	
                1,328,467.71
                  

              	
                1,328,467.71
                  

              	
                (45,133.37)

              	
                (9,133.22)

              	
                (36,000.15)

              
	
                01/07

              	
                8.25%

              	
                1,292,467.56
                  

              	
                1,292,467.56
                  

              	
                (45,133.37)

              	
                (8,885.71)

              	
                (36,247.65)

              
	
                02/07

              	
                8.25%

              	
                1,256,219.91
                  

              	
                1,256,219.91
                  

              	
                (45,133.37)

              	
                (8,636.51)

              	
                (36,496.85)

              
	
                03/07

              	
                8.25%

              	
                1,219,723.05
                  

              	
                1,219,723.05
                  

              	
                (45,133.37)

              	
                (8,385.60)

              	
                (36,747.77)

              
	
                04/07

              	
                8.25%

              	
                1,182,975.28
                  

              	
                1,182,975.28
                  

              	
                (45,133.37)

              	
                (8,132.96)

              	
                (37,000.41)

              
	
                05/07

              	
                8.25%

              	
                1,145,974.87
                  

              	
                1,145,974.87
                  

              	
                (45,133.37)

              	
                (7,878.58)

              	
                (37,254.79)

              
	
                06/07

              	
                8.25%

              	
                1,108,720.08
                  

              	
                1,108,720.08
                  

              	
                (45,133.37)

              	
                (7,622.45)

              	
                (37,510.92)

              
	
                07/07

              	
                8.25%

              	
                1,071,209.17
                  

              	
                1,071,209.17
                  

              	
                (45,133.37)

              	
                (7,364.56)

              	
                (37,768.80)

              
	
                08/07

              	
                8.25%

              	
                1,033,440.36
                  

              	
                1,033,440.36
                  

              	
                (45,133.37)

              	
                (7,104.90)

              	
                (38,028.46)

              
	
                09/07

              	
                8.25%

              	
                995,411.90
                  

              	
                995,411.90
                  

              	
                (45,133.37)

              	
                (6,843.46)

              	
                (38,289.91)

              
	
                10/07

              	
                8.25%

              	
                957,121.99
                  

              	
                957,121.99
                  

              	
                (45,133.37)

              	
                (6,580.21)

              	
                (38,553.15)

              
	
                11/07

              	
                8.25%

              	
                918,568.83
                  

              	
                918,568.84
                  

              	
                (45,133.37)

              	
                (6,315.16)

              	
                (38,818.21)

              
	
                12/07

              	
                8.25%

              	
                879,750.63
                  

              	
                879,750.63
                  

              	
                (45,133.37)

              	
                (6,048.29)

              	
                (39,085.08)

              
	
                01/08

              	
                8.25%

              	
                840,665.55
                  

              	
                840,665.55
                  

              	
                (45,133.37)

              	
                (5,779.58)

              	
                (39,353.79)

              
	
                02/08

              	
                8.25%

              	
                801,311.76
                  

              	
                801,311.76
                  

              	
                (45,133.37)

              	
                (5,509.02)

              	
                (39,624.35)

              
	
                03/08

              	
                8.25%

              	
                761,687.41
                  

              	
                761,687.41
                  

              	
                (45,133.37)

              	
                (5,236.60)

              	
                (39,896.77)

              
	
                04/08

              	
                8.25%

              	
                721,790.64
                  

              	
                721,790.64
                  

              	
                (45,133.37)

              	
                (4,962.31)

              	
                (40,171.06)

              
	
                05/08

              	
                8.25%

              	
                681,619.59
                  

              	
                681,619.59
                  

              	
                (45,133.37)

              	
                (4,686.13)

              	
                (40,447.23)

              
	
                06/08

              	
                8.25%

              	
                641,172.35
                  

              	
                641,172.36
                  

              	
                (45,133.37)

              	
                (4,408.06)

              	
                (40,725.31)

              
	
                07/08

              	
                8.25%

              	
                600,447.05
                  

              	
                600,447.05
                  

              	
                (45,133.37)

              	
                (4,128.07)

              	
                (41,005.29)

              
	
                08/08

              	
                8.25%

              	
                559,441.75
                  

              	
                559,441.76
                  

              	
                (45,133.37)

              	
                (3,846.16)

              	
                (41,287.20)

              
	
                09/08

              	
                8.25%

              	
                518,154.55
                  

              	
                518,154.55
                  

              	
                (45,133.37)

              	
                (3,562.31)

              	
                (41,571.05)

              
	
                10/08

              	
                8.25%

              	
                476,583.50
                  

              	
                476,583.50
                  

              	
                (45,133.37)

              	
                (3,276.51)

              	
                (41,856.86)

              
	
                11/08

              	
                8.25%

              	
                434,726.64
                  

              	
                434,726.64
                  

              	
                (45,133.37)

              	
                (2,988.75)

              	
                (42,144.62)

              
	
                12/08

              	
                8.25%

              	
                392,582.02
                  

              	
                392,582.02
                  

              	
                (45,133.37)

              	
                (2,699.00)

              	
                (42,434.37)

              
	
                01/09

              	
                8.25%

              	
                350,147.65
                  

              	
                350,147.66
                  

              	
                (45,133.37)

              	
                (2,407.27)

              	
                (42,726.10)

              
	
                02/09

              	
                8.25%

              	
                307,421.55
                  

              	
                307,421.55
                  

              	
                (45,133.37)

              	
                (2,113.52)

              	
                (43,019.84)

              
	
                03/09

              	
                8.25%

              	
                264,401.71
                  

              	
                264,401.71
                  

              	
                (45,133.37)

              	
                (1,817.76)

              	
                (43,315.60)

              
	
                04/09

              	
                8.25%

              	
                221,086.10
                  

              	
                221,086.11
                  

              	
                (45,133.37)

              	
                (1,519.97)

              	
                (43,613.40)

              
	
                05/09

              	
                8.25%

              	
                177,472.70
                  

              	
                177,472.71
                  

              	
                (45,133.37)

              	
                (1,220.12)

              	
                (43,913.24)

              
	
                06/09

              	
                8.25%

              	
                133,559.46
                  

              	
                133,559.47
                  

              	
                (45,133.37)

              	
                (918.22)

              	
                (44,215.15)

              
	
                07/09

              	
                8.25%

              	
                89,344.32
                  

              	
                89,344.32
                  

              	
                (45,133.37)

              	
                (614.24)

              	
                (44,519.12)

              
	
                08/09

              	
                8.25%

              	
                44,825.19
                  

              	
                44,825.20
                  

              	
                (45,133.37)

              	
                (308.17)

              	
                (44,825.20)