EXHIBIT
        10.1

      


      


      


      As
        of
        August 9 , 2005

      


      Mr.
        James
        Conway

      Chairman
        and CEO 

      Netsmart
        Technologies, Inc.

      3500
        Sunrise Highway, Suite D122

      Great
        River, NY 11739

      


      Dear
        Jim:


      


      This
        letter agreement (the “Agreement”) confirms that Netsmart Technologies, Inc.
        (“Client”) has engaged Griffin Securities, Inc. ("Griffin") to act on a best
        efforts basis as financial advisor and placement agent for the Client in
        connection with the issuance and sale (the “Transaction”) of common stock and
        warrants (the “Securities”) for financing purposes. Griffin is an investment
        banking firm registered as a broker-dealer with the U.S. Securities and Exchange
        Commission (SEC), and member of the National Association of Securities Dealers
        (NASD) and Securities Investor Protection Corporation (SIPC).  

      


      Accordingly,
        we mutually agree as follows: 

      


      1.    Transaction.  
        Griffin
        will assist with a private placement, currently anticipated to be six million
        dollars ($6,000,000), involving the sale of the Client’s Securities to
        accredited investors (“Investor” or “Investors”). The actual terms and structure
        of the Transaction will depend on market conditions and will be subject to
        negotiation between the Client and Griffin and prospective Investors, but
        will
        be similar to the terms attached as Exhibit 2 to this Agreement. 

      


      2.    Engagement.  
        In
        connection herewith, Griffin shall provide the following financial advisory
        and
        placement agent services on a best efforts basis to Client:

      
        	 	 	 


        	
              	a.	
                advise
                  the Client with respect to the form and structure of the Transaction;
                  

              


      

      
        	 	 	 


        	
              	b.	
                assist
                  the Client in developing any necessary materials;
                  

              


        	 	 	 


      

      
        	
              	c.	
                identify
                  and make contact with prospective Investors;


              


      

      
        	 	 	 


        	 	
                d.

              	
                assist
                  the Client in conducting presentations and due diligence meetings
                  with
                  prospective Investors; and 

              


        	 	 	 


      

      
        	 	
                e.

              	
                provide
                  such other financial advisory and investment banking services as
                  are
                  reasonably necessary to consummate the Transaction.
                  

              


      

      


      Griffin
        shall devote such time and efforts to the affairs of the Client as is reasonably
        necessary to render the services contemplated by this Agreement. Any work
        or
        task of Griffin provided for herein which requires Client to provide certain
        information to assist Griffin in completion of the work or task shall be
        excused
        (without effect upon any obligation of Client) until such time as Client
        has
        fully provided all information and cooperation necessary for Griffin to complete
        the work or task, at which time Griffin shall promptly complete such work.
        The
        services of Griffin shall not include the rendering of any legal opinions
        or the
        performance of any work that is in the ordinary purview of a certified public
        accountant. Griffin shall have no power to bind Client to any Transaction
        or
        contract obligation. Client shall have the right to refuse any Transaction
        proposal presented to it without incurring any obligations to Griffin. However,
        in the event that the Client and an Investor introduced by Griffin prior
        to or
        during the term of this Agreement sign a term sheet during the term of this
        Agreement, Client agrees to use its commercially reasonable efforts to close
        each Transaction and agrees not to use the Griffin term sheet to “shop” offers
        from other financing sources.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      


      The
        execution of this Agreement shall not be deemed or construed as obligating
        Griffin to purchase any of the Securities and there is no obligation on the
        part
        of Griffin to place the Securities. Although Griffin cannot guarantee results
        on
        behalf of the Client, it shall use its best efforts to provide the services
        listed above. 

      


      3.    Success
        Fee.  If
        during
        the term of this Agreement, Client accepts financing from any Investor
        introduced (including for such purposes investors introduced by persons
        introduced by Griffin) to Client by Griffin prior to or during the term of
        this
        Agreement (as defined in Section 6 below), or if Client should for a period
        of
        twelve (12) months following the termination of the term of this Agreement
        accept financing from any Investor introduced by Griffin (excluding for such
        purposes investors introduced by persons introduced by Griffin other than
        any
        such investors who purchased Securities during the term of this Agreement)
        prior
        to or during the term of this Agreement, there shall become due and payable
        via
        wire transfer to Griffin immediately upon consummation of each such Transaction,
        a cash fee equal to Five percent (5%) of the gross proceeds payable to Client
        from the sale of Securities. 

      


      4.    Warrants.  As
        additional consideration for each completed Transaction, (i) upon the sale
        of
        Securities during the term of this Agreement to Investors introduced (including
        for such purposes investors introduced by persons introduced by Griffin)
        to
        Client by Griffin prior to or during the term of this Agreement and (ii)
        upon
        the sale of Securities during the twelve (12) month period following termination
        of this Agreement to Investors introduced (excluding for such purposes investors
        introduced by persons introduced by Griffin other than any such investors
        who
        purchased Securities during the term of this Agreement) to Client by Griffin
        prior to or during the term of this Agreement, Client shall promptly grant
        Griffin warrants for the purchase of an amount equal to five percent (5%)
        of the
        Securities issued in such completed Transaction. The warrants to purchase
        common
        stock shall be exercisable over a five (5) year period, have an exercise
        price
        equal to the exercise price of the Investor’s warrants and contain other
        customary terms as Client and Griffin agree, including the ability to assign
        the
        warrants to other accredited representatives of Griffin. 

      


      5.    Expenses.  Griffin
        shall be entitled to reimbursement from the Company for all reasonable
        out-of-pocket expenses in categories and in amounts pre-approved by the Company;
        provided, that such expenses shall not include the fees and expenses of counsel
        to Griffin.      

       

      6.    Term.  
        The term
        of this Agreement shall be three (3) months. Additional extensions may be
        negotiated as necessary at the mutual written consent of the Client and Griffin.
        Upon termination, Griffin shall be entitled to collect all fees and warrants
        earned pursuant to paragraphs 3 and 4, respectively, and expenses actually
        incurred in accordance with paragraph 5, in each case through the date of
        termination. The provisions of paragraphs 3, 4, 5, 7 and Exhibit A shall
        survive
        any termination of this Agreement.

      


      7.    Representations,
        Warranties, and Indemnification.  The
        Client represents and warrants to Griffin that this Agreement has been duly
        authorized, executed and delivered by the Client; and, assuming the due
        execution by Griffin, constitutes a legal, valid and binding agreement of
        the
        Client, enforceable against the Client in accordance with its terms, except
        as
        such enforcement may be subject to or limited by applicable 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.
        The Client agrees to comply in all material respects with all applicable
        securities laws, and will disclose to Griffin all information reasonably
        necessary for Griffin to provide its services hereunder and to notify Griffin
        promptly of any material changes to such information. Client represents and
        warrants to Griffin that any offering materials prepared or disseminated
        by
        Client will be complete and correct in all material respects, will not contain
        any untrue statement of material fact or omit to state a material fact required
        to be stated therein or necessary to make the statements therein in light
        of the
        circumstances made not misleading and that in the event Client becomes aware
        that such information does contain such an untrue statement or omission,
        it will
        promptly correct such information. The Client agrees that it will engage
        its
        legal counsel to assist in the preparation of any private placement memorandum,
        subscription agreement, or other legal documents or definitive agreements
        deemed
        necessary to facilitate the Transaction contemplated herein; and that,
        subsequent to the successful closing of the Transaction, Client and its legal
        counsel will work diligently and expeditiously to issue any shares and/or
        warrants purchased by, and issuable to, Investors. Additionally, the Client
        agrees to indemnify Griffin and its affiliates in accordance with the terms
        and
        conditions contained in Exhibit A to this Agreement.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      


      8.    Confidentiality.  Griffin
        and Client each agree to keep confidential and provide reasonable security
        measures to keep confidential any information where the release of that
        information may be detrimental to their respective business interests. Griffin
        and Client shall each require their employees, agents, affiliates, and others
        who will have access to the information through Griffin and Client respectively,
        to abide by the confidentiality provisions contained in this Agreement. Griffin
        will not, either during its engagement by the Client pursuant to this Agreement
        or at any time thereafter, disclose, use or make known for its or another's
        benefit any confidential information, knowledge, or data of the Client or
        any of
        its affiliates in any way acquired or used by Griffin prior to or during
        the
        term of this Agreement, including the existence of this Agreement and the
        transactions contemplated by this Agreement (including the terms of any proposed
        Transaction). Confidential information, knowledge or data of the Client and
        its
        affiliates shall not include any information that is, or becomes generally
        available to the public other than as a result of a disclosure by Griffin
        or its
        representatives. Notwithstanding the foregoing, Client hereby authorizes
        Griffin
        to transmit to prospective Investors, information and materials provided
        by
        Client and/or developed by Griffin on behalf of Client upon written approval
        by
        Client of such materials. Notwithstanding the restrictions of this paragraph
        8,
        at any time after the consummation or other public announcement of the
        Transaction, Griffin may place an announcement in such newspapers and
        publications as it may choose, stating that Griffin has acted as financial
        advisor and placement agent to the Client in connection with the Transaction,
        and may use, from time to time, the Client’s name and logo and a brief
        description of the Transaction in publications and/or marketing materials
        prepared and/or distributed by Griffin; provided that Griffin obtains Client’s
        prior approval of any such announcement, such approval not to be unreasonably
        withheld.

       

      9.    Non-Circumvention. 
        Client
        hereby agrees that Griffin may introduce (whether by written, oral, data,
        or
        other form of communication) Client to one or more Investors, including,
        without
        limitation, natural persons, corporations, limited liability companies,
        partnerships, unincorporated businesses, sole proprietorships and similar
        entities (hereinafter an “Investor” or “Investors”). The identity of the subject
        Investors, and all other information concerning Investors (including without
        limitation, all mailing information, phone and fax numbers, email addresses
        and
        other contact information) introduced hereunder are the property of Griffin,
        and
        shall be treated as confidential and proprietary information by Client, its
        affiliates, officers, directors, shareholders, employees, agents,
        representatives, successors and assigns. Client shall not use such information,
        except in the context of any arrangement with Griffin in which Griffin is
        directly and actively involved, and never without Griffin’s prior written
        approval. Client further agrees that, without the prior written approval
        of
        Griffin, neither it nor its employees, affiliates or assigns, shall enter
        into,
        or otherwise arrange (either for it/him/herself, or any other person or entity)
        any Transaction or business relationship, contact any person regarding such
        Investors, either directly or indirectly, or any of its affiliates, or accept
        any Transaction, compensation or advantage in relation to such Investors
        except
        directly though Griffin. Griffin is relying on Client’s assent to these terms
        and their intent to be bound by the terms by evidence of their signature.
        Without Client’s signed assent to these terms, Griffin would not introduce any
        Investors or disclose any confidential information to Client as herein
        described.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      


      10.    Governing
        Law. 
        This
        Agreement shall be governed by and construed in accordance with the laws
        of the
        State of New York applicable to contracts executed and to be wholly performed
        therein. The prevailing party shall be entitled to a reasonable sum of
        attorney’s fees and any other reasonable costs and expenses relating
        thereto.

      


      11.    Notice. 
        Any
        notice required to be given hereunder shall be in writing and mailed by first
        class certified or registered mail, sent by recognized overnight courier,
        or
        faxed or e-mailed (with a confirmation in writing sent by overnight courier)
        to
        the addresses of the parties set forth above. Either party may change such
        address by like notice.

      


      12.    Entire
        Agreement. 
        This
        Agreement represents the entire agreement by and between the Client and Griffin
        and supersedes any and all other agreements, either oral or written, with
        respect to the subject matter hereof. Each party to this Agreement acknowledges
        that no representation, inducements, promises or agreement, orally or otherwise,
        have been made by any party, or anyone acting on behalf of any party, which
        are
        not embodied herein, and that no other agreement, statement, or promise not
        contained in this Agreement shall be valid or binding. If any part of this
        Agreement is found, or deemed by a court of competent jurisdiction, to be
        invalid or unenforceable, that part shall be severable from the remainder
        of the
        Agreement. This Agreement may be executed simultaneously in two or more
        counterparts, each of which shall be deemed an original, but all of which
        shall
        constitute one and the same instrument. Any modification of this Agreement
        will
        be effective only if it is in writing and signed by the Client and Griffin.
        

      


      Please
        sign below, and return an original of this letter to the undersigned to indicate
        your acceptance of the terms set forth herein, whereupon this letter and
        your
        acceptance shall constitute a binding agreement by and between Client Inc.
        and
        Griffin Securities, Inc. as of the date first above written. 

      


      We
        appreciate the opportunity to be of service and look forward to a cooperative
        working relationship with you and your staff. 

       

      
        	Sincerely,	 	 	Accepted
                and Agreed:
	 	 	 	 
	/s/ Adrian
                Stecyk	 	 	/s/ James
                Conway
	
                

              	 	 	
                

              
	
                Griffin
                  Securities, Inc.
By:   Adrian Stecyk
Its:  
                  President & CEO

              	 	 	
                Netsmart
                  Technologies, Inc.
By:   James Conway
Its:  
                  Chairman & CEO

              




      
         

        
          	
                  GRIFFIN INITIALS______

                	 	 	
                  CLIENT
                    INITIALS_____

                



      

      
        
           

        

        
           

          
            

          

        

        
           

        

      


      EXHIBIT
        A 

      


      This
        Exhibit A is a part of and is incorporated into that certain letter agreement
        dated as of August 9, 2005, between Netsmart Technologies, Inc. (the "Client")
        and Griffin Securities, Inc. ("Griffin"). The letter agreement and this Exhibit
        A are referred to herein as the "Agreement". Capitalized terms used herein
        without definition shall have the meanings ascribed to them in the letter
        agreement. 

      


      The
        Client agrees to indemnify and hold harmless Griffin, any affiliates and
        the
        respective officers, directors, partners, employees, representatives and
        agents
        and any other persons controlling Griffin or any affiliates within the meaning
        of the Securities Act of 1933 or the Securities Exchange Act of 1934 (Griffin
        and each such other person or entity each being referred to as an "Indemnified
        Person"), to the fullest extent lawful, from and against, and the Indemnified
        Persons shall have no liability to the Client or its owners, affiliates,
        controlling persons, security holders or creditors for, all claims, liabilities,
        losses, damages and expenses, including without limitation and as incurred,
        reimbursement of all reasonable costs of investigating, preparing, pursuing,
        or
        defending any such claim or action, including reasonable fees and expenses
        of
        counsel to the Indemnified Person (collectively, "Losses"), whether or not
        arising out of pending or threatened litigation, governmental investigation,
        arbitration or other alternative dispute resolution, or other action or
        proceeding (individually a "Proceeding" and collectively "Proceedings"),
        directly or indirectly related to or arising out of, or in connection with
        (i)
        actions taken or omitted to be taken by the Client, its affiliates, employees,
        directors, officers, partners, representatives or agents in connection with
        any
        transaction or activities contemplated by this Agreement; (ii) actions taken
        or
        omitted to be taken by any Indemnified Person pursuant to the terms of, or
        in
        connection with services rendered pursuant to, this Agreement, provided that
        in
        the case of this subsection (ii) the Client shall not be responsible for
        any
        Losses arising out of or based upon the willful misconduct or gross negligence
        (as determined by the judgment of a court of competent jurisdiction, no longer
        subject to appeal or further review) of or by such Indemnified Person; and
        (iii)
        any untrue statement or alleged untrue statement of material fact contained
        in
        any information or any omission or alleged omission to state a material fact
        necessary to make the statements therein not misleading (other than untrue
        statements or alleged untrue statements in, or omissions or alleged omissions
        from, information relating to an Indemnified Person or Investor furnished
        in
        writing by or on behalf of such Indemnified Person or Investor expressly
        for use
        in such Information). 

       

      If
        the
        indemnification provided for under this Agreement is unavailable to an
        Indemnified Person in respect of any Losses, then the Client, in lieu of
        indemnifying such Indemnified Person, shall contribute to the amount paid
        or
        payable by such Indemnified Person as a result of such Losses (i) in such
        proportion as is appropriate to reflect the relative benefits received by
        the
        Client on the one hand and by Griffin on the other, from the services rendered
        under this Agreement, or (ii) if the allocation provided by clause (i) is
        not
        permitted by applicable law, in such proportion as is appropriate to reflect
        not
        only the relative benefits referred to in clause (i) above, but also the
        relative fault of the Client on the one hand and the Indemnified Person on
        the
        other, as well as any other relevant equitable considerations. It is further
        agreed that the relative benefits to the Client on the one hand and Griffin
        on
        the other hand with respect to the services rendered under this Agreement
        shall
        be deemed to be in the same proportion as (i) the net proceeds received by
        Client bears to (ii) the fees actually paid to Griffin with respect to the
        services provided pursuant to this Agreement in connection with the transaction.
        The Client also agrees that no Indemnified Person shall have any liability
        to
        the Client for or in connection with this Agreement and the engagement of
        Griffin hereunder, except for such Losses incurred by the Client to the extent
        determined by the judgment of a court of competent jurisdiction, no longer
        subject to appeal or further review, to have resulted from such Indemnified
        Person's willful misconduct or gross negligence, and the Client agrees that
        in
        no event shall the Indemnified Persons be required to contribute an amount
        in
        the aggregate greater than the amounts actually received by Griffin in
        connection with its services performed under this Agreement.

       

       

      
        	
                GRIFFIN INITIALS______

              	 	 	
                CLIENT
                  INITIALS_____

              



      
        
           

        

        
           

          
            

          

        

        
           

        

      

      


      If
        any
        Proceeding is commenced as to which an Indemnified Person demands
        indemnification, the Indemnified Person shall provide notice to the Client
        of
        the commencement of such Proceeding. The Client shall be entitled, to the
        extent
        it wishes, to assume the defense of such Proceeding (unless the Client is
        also a
        party to such Proceeding and the Indemnified Party reasonably determines
        in good
        faith that joint representation would be inappropriate), to assume the defense
        of such Proceeding with counsel reasonably satisfactory to the Indemnified
        Party
        and, after notice from the Indemnifying Party to the Client of its election
        to
        assume the defense of such Proceeding, the Client will not be liable to the
        Indemnified Party for any fees of other counsel or any other expenses with
        respect to the defense of such Proceeding, in each case subsequently incurred
        by
        the Indemnified Party in connection with the defense of such Proceeding.
        If the
        Client assumes the defense of the Proceeding, the Indemnified Party will
        cooperate in good faith with the Client in such defense and will have the
        right
        to participate in the defense of such Proceeding assisted by counsel of its
        own
        choosing and at its own expense. If the Client assumes the defense of the
        Proceeding, (i) no compromise or settlement of such claims may be effected
        by
        the Client without the Indemnified Party’s consent (which consent will not be
        unreasonably withheld, conditioned or delayed) unless (A) there is no finding
        or
        admission of any violation of law or any violation of the rights of any Person
        and no effect on any other claims that may be made against the Indemnified
        Party, and (B) the sole relief provided is monetary damages that are paid
        in
        full by the Client; and (iii) the Indemnified Party will have no liability
        with
        respect to any compromise or settlement of such claims effected without its
        consent if such consent is required by this sentence. If notice is given
        to
        Client of the commencement of any Proceeding and the Client does not, within
        thirty (30) days after the Indemnified Party’s notice is given, give notice to
        the Indemnified Party of its election to assume the defense of such Proceeding,
        the Client will be bound by any determination made in such Proceeding or
        any
        compromise or settlement effected by the Indemnified Party to which the Client
        consents, which consent by the Client may not be unreasonably withheld,
        conditioned or delayed.

       

      The
        indemnity and contribution obligations of the Client set forth herein shall
        be
        in addition to any liability or obligation the Client may have to any
        Indemnified Person at common law or otherwise. The Client hereby consents
        to
        personal jurisdiction, service and venue in any court in which any claim,
        which
        is subject to this Agreement, is brought against Griffin or any other
        Indemnified Person.

       

      
         

        
          	
                  GRIFFIN INITIALS______

                	 	 	
                  CLIENT
                    INITIALS_____

                


        

      

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      


       

       

      EXHIBIT
        B

      


      TERM
        SHEET

      


      Confidential
        & For Discussion Purposes Only

       

      NETSMART,
        INC.

      (NASDAQ:
        NTST)

      


      $6,000,000

      


      Common
        Stock & Warrant Units

       

      
        	
                Amount/
                  Structure:

              	
                $6MM
                  of Netsmart’s Common Stock, together with Warrants to purchase additional
                  Common Stock (the “Units”), issued pursuant to Regulation D of the
                  Securities Act of 1933, as amended, to accredited investors. Each
                  Unit
                  will consist of 1 share of Common Stock and Warrants described
                  below.

              
	
                Unit
                  Purchase Price:

              	
                The
                  Units will be sold at $9.1796 per Unit.

              
	
                Warrants:

              	
                Investors
                  will receive a 5-year Warrant to purchase one (1) share of Common
                  Stock
                  for every four (4) Common Shares purchased, exercisable at $11
                  per share.
                  The exercise price and number of shares subject to exercise will
                  be
                  subject to adjustment pursuant to usual anti-dilution provisions.
                  After
                  the first anniversary of the Closing Date and following registration
                  statement effectiveness, Netsmart shall have the option to call
                  (the
                  “Call”) any outstanding Warrants if the Volume Weighted Average Price
                  (“VWAP”) of the Common Stock is equal to or greater than $30 per share
                  for
                  20 consecutive trading days. 

              
	
                Registration
                  Rights:

              	
                Netsmart
                  will agree to file a registration statement covering the resale
                  of the
                  Common Shares (and Warrant Shares) issuable in connection with
                  the
                  offering within thirty (30) days of the Closing Date, and cause
                  such
                  Registration Statement to be declared effective not later than
                  ninety (90)
                  days following the Closing Date.

              
	
                Closing:

              	
                On
                  or before August 30, 2005 and simultaneously with closing of
                  Target.