SUBSCRIPTION
        AGREEMENT

      


      THIS
        SUBSCRIPTION AGREEMENT (this “Agreement”) made as of the date set forth on the
        signature page hereof between Netsmart Technologies, Inc., a Delaware
        corporation, having its principal office at 3500 Sunrise Highway, Suite D122,
        Great River, NY 11739 (the “Company”), and the undersigned (the
“Subscriber”).

      


      W
        I T N E
        S S E T H:

      


      WHEREAS,
        the Company is offering (the “Offering”) to a limited number of “accredited
        investors,” as such term is defined in Rule 501 of Regulation D under the
        Securities Act of 1933, as amended (the “Securities Act”), shares (the “Shares”)
        of its Common Stock, par value $.01 per share (“Common Stock”), and, in addition
        to the Shares, a 5-year warrant in the form attached as Exhibit W(the “Warrant”)
        to purchase, for an initial exercise price of $11 per share, 1 share of Common
        Stock for every 4 Shares purchased in the Offering (the “Warrant Shares”). (The
        Shares, the Warrant and the Warrant Shares are collectively referred to herein
        as the “Securities”); and 

      


      WHEREAS,
        the Shares and the Warrant are offered and sold as a Unit, consisting of
        1 Share
        and a Warrant, at a purchase price of $9.1796 per Unit (the “Unit Purchase
        Price”) for an aggregate Offering price to the Subscriber and the other
        subscribers in the Offering of $6,000,000; and 

      


      WHEREAS,
        the Subscriber desires to purchase, and the Company desires to sell, Units
        on
        the terms and conditions hereinafter set forth;

      


      NOW,
        THEREFORE, in consideration of the mutual promises and the representations
        and
        covenants hereinafter set forth, the parties hereto agree as
        follows:

      


      
        	
                1.

              	
                PURCHASE
                  AND SALE OF SECURITIES.

              


      

      


      1.1    At
        the
        Closing (the “Closing”), the Company shall issue and sell to the Subscriber and
        the Subscriber shall purchase from the Company, a number of Units equal to
        the
        quotient resulting from dividing (a) the total dollar amount of the Subscriber’s
        subscription (the “Subscription Price”) as set forth on the signature page
        hereof by (b) the Unit Purchase Price. The number of Shares and Warrant Shares
        shall be rounded to the nearest whole number.

       

      1.2    The
        Closing shall be held at a date and time designated by the Company prior
        to
        11:59 p.m. Eastern Standard Time on October 19, 2005 (subject to extension
        of up
        to 15 days at the discretion of the Company without notice to the Subscriber)
        (the “Expiration Date”). The Closing shall be contemporaneous with and subject
        to the closing of the merger transaction (the “Transaction”) described in the
“Recent Developments” section of the Memorandum (as defined) and to the other
        closing conditions set forth herein. The certificates representing the Shares
        and Warrants will be delivered by the Company to the Subscriber within 10
        days
        following the Closing. 


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      1.3    The
        Subscription Price is payable by personal or business check, subject to
        collection, or money order, made payable to North Fork Bank (the “Escrow Agent”)
        F/B/O Netsmart Technologies, Inc. contemporaneously with the execution and
        delivery of this Agreement by the Subscriber. Subscribers may also pay by
        wire
        transfer in immediately available funds to:

       

      North
        Fork Bank 

      ABA
        Routing Number: 021407912

      Account
        Number: 6824029638

      For:
        Netsmart Technologies, Inc. Escrow Account

      


      The
        Subscription Price will remain in escrow until the earlier of termination
        of
        this Agreement or Closing. Accrued interest on the funds in escrow shall
        be
        disbursed to the Company if Closing occurs within fifteen (15) days from
        the
        date of this Agreement; otherwise, accrued interest earned on the funds in
        escrow (including during the aforementioned fifteen (15) days) shall be
        disbursed to the Subscriber.

      


      2.    REPRESENTATIONS
        AND WARRANTIES OF SUBSCRIBER.

      


      2.1    The
        Subscriber acknowledges that the purchase of the Securities involves a high
        degree of risk including, but not limited to, the following: (i) an investment
        in the Company is speculative, and only investors who can afford the loss
        of
        their entire investment should consider investing in the Company and the
        Securities; (ii) the Subscriber may not be able to liquidate his/its investment;
        (iii) transferability of the Securities is limited; (iv) in the event of
        a
        disposition of the Securities, the Subscriber could sustain the loss of his/its
        entire investment and (v) the Company has not paid any dividends on its Common
        Stock, except as described in the Company’s filings with the Securities and
        Exchange Commission, and the Company does not anticipate the payment of
        dividends in the foreseeable future. 

      


      2.2    The
        Subscriber represents that the Subscriber is an “accredited investor”, as such
        term is defined in Rule 501 of Regulation D under the Securities Act, as
        indicated by the Subscriber’s responses to the questions contained in Article 8
        hereof. If the Subscriber is a natural person, the Subscriber has reached
        the
        age of majority in the state or other jurisdiction in which the Subscriber
        resides, has adequate means of providing for the Subscriber’s current financial
        needs and contingencies, is able to bear the economic risks of an investment
        in
        the Securities for an indefinite period of time, has no need for liquidity
        in
        such investment and, at the present time, can afford a complete loss of such
        investment.

       

      2.3    The
        Subscriber acknowledges and represents that the Subscriber has prior investment
        experience, including investment in securities which are non-listed,
        unregistered and/or not traded on the Nasdaq National or SmallCap Market
        or a
        national stock exchange, or the Subscriber has employed the services of a
        financial or investment advisor, attorney and/or accountant to review the
        documents and information furnished and/or made available by the Company
        to the
        Subscriber and to evaluate the merits and risks of such an investment on
        the
        Subscriber’s behalf. 

      


      
        
          
          

        

        
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      2.4    The
        Subscriber acknowledges receipt and review of, among other information,
        a private placement memorandum (the “Memorandum”) relating to this Offering and
        describing the proposed Transaction
        to which consummation of this Offering is subject. Subscriber further represents
        that the Subscriber has been furnished by the Company during the course of
        this
        Offering transaction, all information regarding the Company which the Subscriber
        or its advisors or representatives have requested, and has been afforded
        the
        opportunity to ask questions of and receive answers from duly authorized
        officers or other representatives of the Company concerning the Company,
        the
        proposed Transaction and the terms and conditions of the Offering. 

      


      2.5   (a)    The
        Subscriber has relied solely upon the information provided by the Company
        in
        making the decision to invest in the Securities. The Subscriber is familiar
        with
        and understands the terms of the Offering, including the rights to which
        the
        Subscriber is entitled under this Agreement. In evaluating the suitability
        of an
        investment in the Company, the Subscriber has not relied upon any representation
        or other information (whether oral or written) from the Company, or any agent,
        employee or affiliate of the Company other than as set forth in
        the
        Memorandum or the documents incorporated by reference therein and the results
        of
        Subscriber’s own independent investigation. To the extent necessary, the
        Subscriber has retained, at his/its sole expense, and relied upon appropriate
        professional advice regarding the investment, tax and legal merits and
        consequences of this Agreement and its purchase of the Securities hereunder.
        

      


      (b)    The
        Subscriber represents that no Securities were offered or sold to it by means
        of
        any form of general solicitation or general advertising, and in connection
        therewith the Subscriber did not receive or review any advertisement, article,
        notice or other communication published in a newspaper or magazine or similar
        media or broadcast over television or radio whether closed circuit, or generally
        available, or attend any seminar meeting or industry investor conference
        whose
        attendees were invited by any general solicitation or general
        advertising.

      


      2.6    The
        Subscriber acknowledges that none of the Offering, the Memorandum or the
        Securities have been reviewed by the Securities and Exchange Commission (“SEC”)
        or any state securities regulatory authority or other governmental body or
        agency, since the Offering is intended to be exempt from the registration
        requirements of the Securities Act pursuant to Regulation D promulgated under
        the Securities Act. The Subscriber understands that if required by the laws
        or
        regulations or any applicable jurisdictions, the Offering contemplated hereby
        will be submitted to the appropriate authorities of such state(s) for
        registration of exemption therefrom. 

      


      2.7    The
        Subscriber understands that the Securities have not been registered under
        the
        Securities Act by reason of a claimed exemption under the provisions of the
        Securities Act which depends, in part, upon the Subscriber’s investment
        intention. In this connection, the Subscriber hereby represents that the
        Subscriber is purchasing the Securities for the Subscriber’s own account for
        investment purposes only and not with a view toward the resale or distribution
        to others and has no contract, undertaking, agreement or other arrangement,
        in
        existence or contemplated, to sell, pledge, assign or otherwise transfer
        the
        Securities to any other person. The Subscriber, if an entity, also represents
        that it was not formed for the purpose of purchasing the Securities.


      


      
        
          
          

        

        
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      2.8    The
        Subscriber understands that although there currently is a public market for
        the
        Company’s Common Stock, Rule 144 promulgated under the Securities Act (“Rule
        144”) requires, among other conditions, a one-year holding period prior to the
        resale (in limited amounts) of securities acquired in a non-public offering
        without having to satisfy the registration requirements under the Securities
        Act. The Subscriber understands and acknowledges that the Company is under
        no
        obligation to register any of the Securities under the Securities Act or
        any
        state securities or “blue sky” laws or assist the Subscriber in obtaining an
        exemption from various registration requirements, other than as set forth
        in
        Article 6 herein. 

      


      2.9    The
        Subscriber consents to the placement of a legend on any certificate or other
        document evidencing the Securities substantially as set forth below. The
        Subscriber is aware that the Company will make a notation in its appropriate
        records, or will cause such notation to be made in the records of its transfer
        agent, with respect to the restrictions on the transferability of the
        Securities. 

      


      THE
        SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
        ACT
        OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE.
        THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE
        AND
        MAY NOT BE TRANSFERRED OR RESOLD EXCEPT PURSUANT TO REGISTRATION UNDER THE
        ACT
        AND APPLICABLE STATE SECURITIES LAWS OR EXEMPTION THEREFROM. THE ISSUER OF
        THESE
        SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY
        TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN
        COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

       

      The
        foregoing legend will be removed upon the registration and sale of the
        Securities in accordance with Section 6 of this Agreement.

      


      2.10   The
        Subscriber agrees to supply
        the Company, within five (5) days after the Subscriber receives the request
        therefor from the Company, with such additional information concerning the
        Subscriber as the Company reasonably deems necessary or advisable in order
        to
        establish or verify the Subscriber’s representations contained
        herein.

      


      
        
          
          

        

        
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      2.11   The
        Subscriber represents that the address of the Subscriber furnished by Subscriber
        on the signature page hereof is the Subscriber’s principal residence if
        Subscriber is an individual or its principal business address if it is a
        corporation or other entity.

      


      2.12   The
        Subscriber represents that the Subscriber has full power and authority
        (corporate, statutory and otherwise) to execute, deliver, and perform this
        Agreement and to purchase the Securities. This Agreement constitutes the
        legal,
        valid and binding obligation of the Subscriber, enforceable against the
        Subscriber in accordance with its terms, subject to laws of general application
        relating to bankruptcy, insolvency and the relief of debtors and rules of
        law
        governing specific performance, injunctive relief or other equitable remedies,
        and to limitations of public policy.

      


      2.13   If
        the
        Subscriber is a corporation, partnership, limited liability company, trust,
        employee benefit plan, individual retirement account, Keogh Plan, or other
        entity (a) it is authorized and qualified to become an investor in the Company
        and the person signing this Agreement on behalf of such entity has been duly
        authorized by such entity to do so and (b) it is duly organized, validly
        existing and in good standing under the laws of the jurisdiction of its
        organization.

       

      2.14   The
        Subscriber understands, acknowledges and agrees with the Company that this
        Subscription may be rejected, in whole or in part, by the Company, in the
        sole
        discretion of the Company, at any time before any Closing notwithstanding
        prior
        receipt by the Subscriber of notice of acceptance of the Subscriber’s
        Subscription; provided that the Company may not so reject this Subscription
        after acceptance of the Subscriber’s Subscription and the deposit into escrow of
        available funds in the amount of the Subscriber’s Subscription Price.


       

      2.15   The
        Subscriber understands, acknowledges and agrees with the Company that, (i)
        except as otherwise set forth herein, the subscription hereunder is irrevocable
        by the Subscriber, (ii) except as required by law, the Subscriber is not
        entitled to cancel, terminate or revoke this Agreement or any agreements
        of the
        Subscriber hereunder and (iii) this Agreement and such other agreements of
        the
        Subscriber shall survive the death, disability or dissolution of the Subscriber
        and shall be binding upon and inure to the benefit of the parties and their
        heirs, executors, administrators, successors, legal representatives and
        permitted assigns. If the Subscriber is more than one person, the obligations
        of
        the Subscriber hereunder shall be joint and several and the agreements,
        representations, warranties and acknowledgments herein contained shall be
        deemed
        to be made by and be binding upon each such person and his/her heirs, executors,
        administrators, successors, legal representatives and permitted
        assigns.

       

      2.16   The
        Subscriber agrees that during the period from the date that Subscriber was
        first
        contacted with respect to the Offering through the Closing Date or any
        abandonment of termination of the Offering, the Subscriber has not and will
        not,
        directly or indirectly, through related parties, affiliates or otherwise
        sell
        "short" or "short against the box" (as those terms are generally understood)
        any
        equity security of the Company. 

      


      
        
          
          

        

        
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      2.17    The
        Subscriber acknowledges that the information contained in the Memorandum
        and
        this Agreement or otherwise made available to the Subscriber is confidential
        and
        non-public and agrees that all such information shall be kept in confidence
        by
        the Subscriber and neither used by the Subscriber for the Subscriber’s personal
        benefit (other than in connection with this Subscription) nor disclosed to
        any
        third party for any reason, notwithstanding that a Subscriber’s subscription may
        not be accepted by the Company; provided,
        however,
        that
        this obligation shall not apply to any such information that (i) is part
        of the
        public knowledge or literature and readily accessible at the date hereof,
        (ii)
        becomes part of the public knowledge or literature and readily accessible
        by
        publication (except as a result of a breach of this provision); (iii) is
        received from third parties (except third parties who disclose such information
        in violation of any confidentiality agreements or obligations, including,
        without limitation, any subscription or other similar agreement entered into
        with the Company); or (iv) is required to be disclosed by the Subscriber
        by law
        or legal process; provided, further, that Subscriber shall provide the Company
        with written notice of any legal action that seeks such disclosure and, upon
        the
        request and at the expense of the Company, the Subscriber will cooperate
        in all
        reasonable respects to contest the disclosure, or obtain a protective order
        or
        other remedy. 

      


      2.18   If
        the
        Subscriber is purchasing the Securities in a fiduciary capacity for another
        person or entity, including without limitation a corporation, partnership,
        trust
        or any other entity, the Subscriber has been duly authorized and empowered
        to
        execute this Agreement and all other subscription documents, and such other
        person is an “accredited investor” and otherwise fulfills all the requirements
        for purchase of the shares as such requirements are set forth herein, concurs
        in
        the purchase of the Securities and agrees to be bound by the obligations,
        representations, warranties and covenants contained herein. Upon request
        of the
        Company, the Subscriber will provide true, complete and current copies of
        all
        relevant documents creating the Subscriber, authorizing its investment in
        the
        Company and/or evidencing the satisfaction of the foregoing, which information
        shall be kept confidential by the Company.

      


      2.19   The
        Subscriber represents that no
        authorization, approval, consent or license of any person is required to
        be
        obtained for the purchase of the Securities
        by the
        Subscriber, other than as have been obtained and are in full force and effect.
        The execution and delivery of this Agreement does not, and the consummation
        of
        the transactions contemplated hereby will not, result in any violation of
        or
        constitute a default under any material agreement or other instrument to
        which
        the Subscriber is a party or by which the Subscriber or any of its properties
        are bound, or to the best of the Subscriber’s knowledge, any permit, franchise,
        judgment, order, decree, statute, rule or regulation to which the Subscriber
        or
        any of its businesses or properties is subject.

      


      2.20   The
        Subscriber represents that the representations, warranties and agreements
        of the
        Subscriber contained herein, in the Registration Questionnaire attached hereto
        as Appendix A (the “Registration Questionnaire”) and in any other writing
        delivered in connection with the transactions contemplated hereby shall be
        true
        and correct in all respects on the date hereof and as of the date of Closing
        as
        if made on and as of such date and shall survive the execution and delivery
        of
        this Agreement and the purchase of the Securities. The Subscriber agrees
        that
        any placement agent in the Offering shall be entitled to rely on the
        representations, warranties and agreements of the Subscriber contained herein
        as
        if such representations, warranties and agreements were made or provided
        to such
        placement agent. The Subscriber agrees that the Company shall be entitled
        to
        rely on the representations, warranties and agreements of the Subscriber
        contained herein for the purpose of preparing any Registration Statement
        prepared by the Company pursuant to Section 6 hereof. 

      


      
        
          
          

        

        
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      3.    REPRESENTATIONS
        BY AND COVENANTS OF THE COMPANY.

      


      The
        Company represents and warrants to the Subscriber that as of the date of
        this
        Agreement and at Closing:

      


      3.1    Organization,
        Good Standing and Qualification.
        The
        Company is a corporation duly organized, validly existing and in good standing
        under the laws of the State of Delaware and has full corporate power and
        authority to conduct its business as currently conducted. The Company is
        duly
        qualified as a foreign corporation to do business and is in good standing
        in
        every jurisdiction in which the property owned or leased by it or the nature
        of
        the business conducted by it makes such qualification necessary, except to
        the
        extent that the failure to be so qualified or in good standing would not
        have a
        Material Adverse Effect (as hereinafter defined)..

       

      3.2    Capitalization.
        (a) The
        authorized capital stock of the Company consists of 15,000,000 shares
        of
        Common Stock and 3,000,000 shares of preferred stock. As of September 1,
        2005,
        there were 5,390,950 shares of Common Stock issued and outstanding, all of
        which
        are duly authorized, validly issued, fully paid and non-assessable and no
        shares
        of preferred stock issued and outstanding. In addition, there were 1,100,875
        shares of Common Stock reserved for issuance pursuant to outstanding options
        and
        warrants. All of the securities issued by the Company have been issued in
        accordance with all applicable federal and state securities laws. Other than
        as
        set forth above and the issuance of shares of Common Stock pursuant to the
        Transaction, there are no other options, warrants, calls, rights, commitments
        or
        agreements of any character to which the Company is a party or by which the
        Company is bound or obligating the Company to issue, deliver, sell, repurchase
        or redeem, or cause to be issued, delivered, sold, repurchased or redeemed,
        any
        shares of the capital stock of the Company or obligating the Company to grant,
        extend or enter into any such option, warrant, call, right, commitment or
        agreement. There are no preemptive rights or rights of first refusal or similar
        rights which are binding on the Company permitting any person to subscribe
        for
        or purchase from the Company shares of its capital stock pursuant to any
        provision of law, the Company’s Certificate of Incorporation (the “Certificate
        of Incorporation”) or the Company’s By-laws (the “By-laws”) or by agreement or
        otherwise. There are no securities or instruments or any agreements containing
        or understandings providing for anti-dilution or similar provisions that
        will be
        triggered by the issuance of the Securities or issuance of the Warrant Shares.
        True and correct copies of the Company’s Certificate of Incorporation and
        By-laws are contained or incorporated into the exhibits to the Term Sheet.
        

       

      (b)    The
        Securities have been duly authorized and, when issued, delivered and paid
        for in
        the manner set forth in this Agreement, will be duly authorized, validly
        issued,
        fully paid and non-assessable. The Warrant Shares have been duly authorized
        and,
        when issued, delivered and paid for in the manner set forth in the Warrant,
        will
        be duly authorized, validly issued, fully paid and non-assessable. No
        stockholder of the Company has any right to request or require the Company
        to
        register the sale of any shares owned by such stockholder under the Securities
        Act. No further approval or authority of the stockholders or the Board of
        Directors of the Company will be required for the issuance and sale of the
        Securities to be sold by the Company as contemplated herein.

      


      
        
          
          

        

        
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      (c)    Each
        of
        the Company’s subsidiaries (the "Subsidiaries") is set forth in Schedule 3.2(c
        ). Each Subsidiary is a corporation or other business entity duly organized,
        validly existing and in good standing under the laws of its jurisdiction
        of
        incorporation or organization. Each Subsidiary (i) has the corporate or other
        organizational power and authority required for it to own its properties
        and
        assets and to carry on its business as it is now being conducted and (ii)
        is
        duly qualified to do business and is in good standing in each jurisdiction
        in
        which the ownership of its properties or the conduct of its business requires
        such qualification, except for jurisdictions in which the failure to be so
        qualified or in good standing would not, individually or in the aggregate,
        have
        a Material Adverse Effect. All the outstanding shares of capital stock of,
        or
        other ownership interests in, the Subsidiaries are duly authorized, validly
        issued, fully paid and non-assessable and are owned by the Company free and
        clear of all liens, claims, mortgages, encumbrances, pledges, security
        interests, equities or charges of any kind (each, a "Lien"), except a Lien
        in
        favor of lenders. All the outstanding shares of capital stock of, or other
        ownership interests in, the Subsidiaries are wholly owned by the Company.
        Other
        than the Subsidiaries, there are no entities 10% or more of whose outstanding
        voting securities or other equity interests are owned, directly or indirectly,
        through one or more intermediaries, by the Company.

      


      3.3    Authorization;
        Enforceability.
        The
        Company has all corporate power and authority to enter into this Agreement
        and
        to consummate the transactions contemplated hereby. All corporate action
        on the
        part of the Company necessary for the authorization, execution, delivery
        and
        performance of this Agreement by the Company, the authorization, sale, issuance
        and delivery of the Securities contemplated herein and the performance of
        the
        Company’s obligations hereunder has been taken. This Agreement has been duly
        executed and delivered by the Company and constitutes a legal, valid and
        binding
        obligation of the Company, enforceable against the Company in accordance
        with
        its terms, subject to laws of general application relating to bankruptcy,
        insolvency and the relief of debtors and rules of law governing specific
        performance, injunctive relief or other equitable remedies, and to limitations
        of public policy. The issuance and sale of the Securities contemplated hereby
        will not give rise to any preemptive rights or rights of first refusal on
        behalf
        of any person.

      


      3.4    No
        Conflict; Governmental and Other Consents. 

      


      (a)    The
        execution and delivery by the Company of this Agreement and the consummation
        of
        the transactions contemplated hereby will not result in the violation of
        any
        material law, statute, rule, regulation, order, writ, injunction, judgment
        or
        decree of any court or governmental authority to or by which the Company
        or any
        Subsidiary is bound, or of any provision of the Certificate of Incorporation
        or
        By-Laws of the Company, and will not conflict with, or result in a breach
        or
        violation of, any of the terms or provisions of, or constitute (with due
        notice
        or lapse of time or both) a default under, any material lease, loan agreement,
        mortgage, security agreement, trust indenture or other agreement or instrument
        to which the Company or any Subsidiary is a party or by which it is bound
        or to
        which any of its properties or assets is subject, nor result in the creation
        or
        imposition of any lien upon any of the properties or assets of the Company
        or
        any Subsidiary.

      


      
        
          
          

        

        
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      (b)    No
        consent, approval, authorization or other order of any governmental authority
        or
        other third-party is required to be obtained by the Company or any Subsidiary
        in
        connection with the authorization, execution and delivery of this Agreement
        or
        with the authorization, issue and sale of the Securities, except such filings
        as
        may be required to be made with the SEC, the NASD and with any state or foreign
        blue sky or securities regulatory authority. Without limiting the foregoing,
        and
        assuming the accuracy of the Subscriber’s representations and warranties set
        forth in Article II, no registration under the Securities Act is required
        for
        the offer and sale of the Shares and Warrants by the Company to the Subscriber
        or the issuance of Warrant Shares as contemplated hereby. The issuance and
        sale
        of the Shares and Warrants hereunder does not, and the issuance of Warrant
        Shares will not, contravene the rules and regulations of the NASDAQ National
        Market.

      


      3.5    Accuracy
        of SEC Filings.
        All
        reports and any amendments thereto required to be filed by the Company under
        the
        Securities Exchange Act of 1934, as amended (the “Exchange Act”) (“SEC Reports”)
        have been duly filed; complied at the time of filing in all material respects
        with the requirements of their respective forms and the rules and regulations
        thereunder; except to the extent updated or superseded by any subsequently
        filed
        report, were complete and correct in all material respects as of the dates
        at
        which the information was furnished; and as updated or superseded such reports
        do not contain (as of their respective dates) any untrue statements of a
        material fact nor omit to state any material fact necessary in order to make
        the
        statements contained therein, in light of the circumstances under which they
        were made, not misleading. The financial statements of the Company included
        in
        the SEC Reports comply in all material respects with applicable accounting
        requirements and the rules and regulations of the Commission with respect
        thereto as in effect at the time of filing. Such financial statements have
        been
        prepared in accordance with United States generally accepted accounting
        principles applied on a consistent basis during the periods involved
        (“GAAP”),
        except as may be otherwise specified in such financial statements or the
        notes
        thereto and except that unaudited financial statements may not contain all
        footnotes required by GAAP, and fairly present in all material respects the
        financial position of the Company and its consolidated subsidiaries as of
        and
        for the dates thereof and the results of operations and cash flows for the
        periods then ended, subject, in the case of unaudited statements, to normal,
        immaterial, year-end audit adjustments.

      


      3.6    Investment
        Company.
        The
        Company is not an “investment company” within the meaning of such term under the
        Investment Company Act of 1940, as amended, and the rules and regulations
        of the
        SEC thereunder.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

         

      

    

     

    
      3.7    Material
        Changes.
        Since
        the date of the latest financial statements included in the SEC Reports,
        except
        as disclosed in the SEC Reports, in this Agreement or in the case of clause
        (ii)
        in connection with the Transaction, (i) there has been no event, occurrence
        or
        development that has had or that could reasonably be expected to result in
        a
        Material Adverse Effect, (ii) the Company and its Subsidiaries have not incurred
        any liabilities (contingent or otherwise) other than (x) trade payables,
        accrued
        expenses and other liabilities incurred in the ordinary course of business
        consistent with past practice and (y) liabilities not required to be reflected
        in the Company’s financial statements pursuant to generally accepted accounting
        principles in the United States (“GAAP”)
        or
        required to be disclosed in filings made with the SEC, (iii) the Company
        and its
        Subsidiaries have not altered its method of accounting, except as may be
        required by a change in accounting standards, or the identity of its auditors,
        (iv) the Company and its Subsidiaries have not declared or made any dividend
        or
        distribution of cash or other property to its stockholders or purchased,
        redeemed or made any agreements to purchase or redeem any shares of its capital
        stock, and (v) the Company and its Subsidiaries have not issued any equity
        securities to any officer, director or Affiliate, except pursuant to existing
        Company stock option plans. The Company does not have pending before the
        SEC any
        request for confidential treatment of information. “Material
        Adverse Effect”
        means
        any of (i) a material and adverse effect on the legality, validity or
        enforceability of this Agreement and the Warrants, (ii) a material and adverse
        effect on the results of operations, assets, condition (financial or otherwise),
        business or prospects of the Company and its Subsidiaries, taken as a whole
        or
        (iii) a material and adverse impairment to the Company's ability to perform
        on a
        timely basis its obligations under this Agreement and the Warrants.
“Affiliate”
        means
        any person (including any individual or entity) that, directly or indirectly
        through one or more intermediaries, controls or is controlled by or is under
        common control with a person, as such terms are used in and construed under
        Rule
        144.

       

      3.8    Compliance.
        The
        Company (i) is not in default under or in violation of (and no event has
        occurred that has not been waived that, with notice or lapse of time or both,
        would result in a default by the Company under), nor has the Company received
        written notice of a claim that it is in default under or that it is in violation
        of, any indenture, loan or credit agreement or any other agreement or instrument
        to which it is a party or by which it or any of its properties is bound (whether
        or not such default or violation has been waived), (ii) is not in violation
        of
        any order of any court, arbitrator or governmental body, or (iii) to the
        Company’s knowledge, is not or has not been in violation of any statute, rule or
        regulation of any governmental authority, including without limitation all
        foreign, federal, state and local laws relating to taxes, environmental
        protection, occupational health and safety, product quality and safety and
        employment and labor matters, except in each case as could not, individually
        or
        in the aggregate, have or reasonably be expected to result in a Material
        Adverse
        Effect.

       

      3.9    Litigation.
        There
        is no action, suit, inquiry, notice of violation, proceeding or investigation
        pending or, to the knowledge of the Company, threatened against or affecting
        the
        Company or its properties before or by any court, arbitrator, governmental
        or
        administrative agency or regulatory authority (federal, state, county, local
        or
        foreign) (collectively, an “Action”) which (i) adversely affects or challenges
        the legality, validity or enforceability of this Agreement or the offering
        described in the Term Sheet or (ii) except as set forth in the SEC Reports,
        would, if there were an unfavorable decision, individually or in the aggregate,
        have or reasonably be expected to result in a Material Adverse Effect. Neither
        the Company nor any director or officer thereof (in his or her capacity as
        such)
        is or has been the subject of any Action involving a claim of violation of
        or
        liability under federal or state securities laws or a claim of breach of
        fiduciary duty, except as specifically disclosed in the SEC Reports. There
        has
        not been, and to the Company’s knowledge, there is not pending any investigation
        by the SEC involving the Company or any current or former director or officer
        of
        the Company (in his or her capacity as such). The Company is not nor has
        it ever
        been the subject of any Action involving a claim of violation of or liability
        under federal or state securities laws. There has not been, and to the knowledge
        of the Company, there is not pending or contemplated, any investigation by
        the
        SEC involving the Company. The SEC has not issued any stop order or other
        order
        suspending the effectiveness of any registration statement filed by the Company
        under the Exchange Act or the Securities Act.

    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    3.10   Sarbanes-Oxley;
      Internal Accounting Controls.
      The
      Company is in material compliance with all provisions of the Sarbanes-Oxley
      Act
      of 2002 which are applicable to it as of the Closing Date. The
      Company and the Subsidiaries maintain a system of internal accounting controls
      sufficient to provide reasonable assurance that (i) transactions are executed
      in
      accordance with management's general or specific authorizations, (ii)
      transactions are recorded as necessary to permit preparation of financial
      statements in conformity with GAAP and to maintain asset accountability, (iii)
      access to assets is permitted only in accordance with management's general
      or
      specific authorization, and (iv) the recorded accountability for assets is
      compared with the existing assets at reasonable intervals and appropriate action
      is taken with respect to any differences. The Company has established disclosure
      controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
      15d-15(e)) for the Company and designed such disclosure controls and procedures
      to ensure that material information relating to the Company, including its
      Subsidiaries, is made known to the certifying officers by others within those
      entities, particularly during the period in which the Company's most recently
      filed periodic report under the Exchange Act, as the case may be, is being
      prepared. The Company's certifying officers have evaluated the effectiveness
      of
      the Company's disclosure controls and procedures as of the end of the period
      covered by the most recently filed periodic report under the Exchange Act (such
      date, the “Evaluation
      Date”).
      The
      Company presented in its most recently filed periodic report under the Exchange
      Act the conclusions of the certifying officers about the effectiveness of the
      disclosure controls and procedures based on their evaluations as of the
      Evaluation Date. Since the Evaluation Date, there have been no significant
      changes in the Company's internal controls (as such term is defined in Item
      307(b) of Regulation S-K under the Exchange Act) or, to the Company's knowledge,
      in other factors that could significantly affect the Company's internal
      controls.

    


    4.    TERMS
      OF SUBSCRIPTION.

    


    4.1    The
      Company reserves the right to reject the subscription made hereby, in whole
      or
      in part, in its sole discretion; provided that the Company may not so reject
      such subscription after acceptance of the Subscriber’s Subscription and the
      deposit into escrow of available funds in the amount of the Subscriber’s
      Subscription Price. 

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    4.2    Pending
      the sale of the Securities, all funds paid hereunder shall be deposited by
      the
      Company in escrow with the Escrow Agent. 

    


    4.3    The
      Subscriber hereby authorizes and directs the Company to deliver the Shares
      and
      Warrants to be issued to the Subscriber pursuant to this Agreement to the
      residential or business address(es) for delivery of the Securities indicated
      on
      the signature page hereto.

     

    4.4    The
      Subscriber hereby authorizes and directs the Company to return, without
      interest, any funds for unaccepted subscriptions to the same account from which
      the funds were drawn. If the Closing shall not have taken place by the
      Expiration Date, all funds paid by the Subscriber will be returned to the
      Subscriber without interest.

    


    4.5    The
      Company’s agreement with each Subscriber is a separate agreement and the sale of
      the Securities to each Subscriber is a separate sale. The Subscribers are not
      a
“group” within the meaning of Section 13(d)(3) of the Exchange Act.

    


    4.6    At
      the
      Closing, Subscriber shall receive an opinion of counsel to the Company covering
      the legal matters set forth on Appendix B attached hereto.

    


    5.    CLOSING
      CONDITIONS.

    


    5.1    The
      Subscribers’ obligation to purchase the Securities at the Closing is subject to
      (a) the closing of the Transaction on or before the Expiration Date, and (b)
      the
      truth and accuracy of each of the representations and warranties of the Company
      as of the Closing as if made at the Closing, which conditions may be waived
      in
      writing at the option of each Subscriber to the extent permitted by law.


    


    6.    REGISTRATION
      RIGHTS.
      

    


    6.1    The
      Company covenants and agrees with the Holder that the terms and conditions
      of
      this Section 6 shall be contained in each Subscription Agreement entered into
      by
      the Company in connection with the Offering.

    


    6.2    As
      used
      in this Section 6, the following terms shall have the following
      meanings:

    


    (a)    “Affiliate”
      shall
      mean, with respect to any Person (as defined below), any other Person
      controlling, controlled by or under direct or indirect common control with
      such
      Person (for the purposes of this definition “control,” when used with respect to
      any specified Person, shall mean the power to direct the management and policies
      of such person, directly or indirectly, whether through ownership of voting
      securities, by contract or otherwise; and the terms “controlling” and
“controlled” shall have meanings correlative to the foregoing).

    


    (b)    “Business
      Day”
      shall
      mean a day Monday through Friday on which banks are generally open for business
      in New York.

    


    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    (c)    “Holders”
      shall
      mean the Subscribers and any person holding Registrable Securities or any person
      to whom the rights under Article 6 have been transferred in accordance with
      Section 6.9 hereof.

    


    (d)    “Person”
      shall
      mean any person, individual, corporation, limited liability company,
      partnership, trust or other nongovernmental entity or any governmental agency,
      court, authority or other body (whether foreign, federal, state, local or
      otherwise).

    


    (e)    The
      terms
“register,”“registered”
      and
“registration”
      refer
      to the registration effected by preparing and filing a registration statement
      in
      compliance with the Securities Act, and the declaration or ordering of the
      effectiveness of such registration statement.

    


    (f)    “Registrable
      Securities”
      shall
      mean the Shares and the Warrant Shares; provided,
      however,
      that
      securities shall only be treated as Registrable Securities if and only for
      so
      long as they (A) have not been disposed of pursuant to a registration statement
      declared effective by the SEC; (B) have not been sold in a transaction exempt
      from the registration and prospectus delivery requirements of the Securities
      Act
      so that all transfer restrictions and restrictive legends with respect thereto
      are removed upon the consummation of such sale; (C) are held by a Holder or
      a
      permitted transferee pursuant to Section 6.9; or (D) are not eligible
      for
      sale pursuant to Rule 144(k) (or any successor thereto) under the Securities
      Act. 

    


    (g)    “Registration
      Expenses”
      shall
      mean all expenses incurred by the Company in complying with Section 6.3
      hereof, including, without limitation, all registration, qualification and
      filing fees, printing expenses, escrow fees, fees and expenses of counsel for
      the Company, blue sky fees and expenses and the expense of any special audits
      incident to or required by any such registration.

    


    (h)    “Registration
      Statement”
      shall
      have the meaning ascribed to such term in Section 6.3.

    


    (i)    “Registration
      Period”
      shall
      have the meaning ascribed to such term in Section 6.3.

    


    (j)    “Selling
      Expenses”
      shall
      mean all underwriting discounts and selling commissions applicable to the sale
      of Registrable Securities and, except to the extent set forth in the definition
      of Registration Expenses, all fees and expenses of legal counsel for any
      Holder.

    


      6.3    (a)
      Subject to the terms herein, the Company will, as soon as practicable but not
      later than 30 days following the date of Closing Date, (i) file a
      registration statement with the SEC on the appropriate form (the “Registration
      Statement”) to allow the resale of the Registrable Securities under the
      Securities Act and in accordance with the plan of distribution to be provided
      by
      the Holder, and use its reasonable best efforts to have such Registration
      Statement declared effective by the SEC prior to the date which is 90 days
      after
      the date of Closing (the “Registration Effective Date”) (following advice from
      the SEC that the Registration Statement is not being reviewed or, if reviewed,
      that the staff has no comments, subject to Section 6.5(b)(v) hereof, the Company
      will make a request for acceleration of the effective date to a date not later
      than 3 business days thereafter); and (ii) cause such Registration Statement
      to
      remain effective (the “Registration Period”) until the earlier of (A) such date
      as the holders of the securities have completed the sale of all of the
      Registrable Securities described in the Registration Statement or (B) at such
      time that such shares have become eligible for sale pursuant to Rule 144(k)
      (or
      any successor thereto) under the Securities Act. To the extent permissible,
      such
      Registration Statement also shall cover, to the extent allowable under the
      Securities Act and the rules promulgated thereunder (including Rule 416 under
      the Securities Act), such indeterminate number of additional shares of Common
      Stock resulting from stock splits, stock dividends or similar transactions
      with
      respect to the Registrable Securities. 

    


    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    (b)    The
      Holder
      and the Company hereby agree that the obligations of the Company under this
      Section 6.3 shall not (i) for a period of up to 15 days, require the Company
      to
      make any initial or continuing disclosure in the event that the Company
      determines in good faith and upon advice of counsel that there are present
      material undisclosed circumstances or developments with respect to which the
      disclosure that would be required would have a material adverse effect on the
      Company, or (ii) prevent the Company from contesting any position taken by
      the
      Commission in any comment letter that, in each case, it determines in good
      faith
      as advised by counsel is not required or may not be in the best interests of
      the
      Company or its shareholders or (iii) require the Company, to incur any expenses
      which are not reasonable in the circumstances.

    


    (c)    If:
      (i) a
      Registration Statement is not filed within 30 days of the Closing Date or (ii)
      subject to Section 6.3(b)(i), the Company fails to file with the Commission
      a
      request for acceleration in accordance with Rule 461 promulgated under the
      Securities Act, within three business days of the date that the Company is
      notified (orally or in writing, whichever is earlier) by the Commission that
      a
      Registration Statement will not be “reviewed,” or is not subject to further
      review, or (iii) prior to the date when such Registration Statement is first
      declared effective by the Commission, and subject to Section 6.3(b)(ii), the
      Company fails to file a pre-effective amendment and otherwise respond in writing
      to comments made by the Commission in respect of such Registration Statement
      within 30 calendar days after the receipt of comments by or notice from the
      Commission that such amendment is required in order for a Registration Statement
      to be declared effective, or (iv) a Registration Statement filed or required
      to
      be filed hereunder is not declared effective by the Commission on or before
      the
      Registration Effectiveness Date, other than due to (x) the failure of the
      Commission to deliver its initial written comments on such Registration
      Statement within 30 days of its filing, (y) the delivery by the Commission
      of
      comments on the Company’s subsequent filings (except to the extent that such
      subsequent comments were due to the Company’s failure to respond in the manner
      and to the extent required by the comments of the Commission) or (z) the failure
      of the Commission to timely deliver written comments on the Company’s subsequent
      filings or (v) after a Registration Statement is first declared effective by
      the
      Commission, it ceases for any reason to remain continuously effective as to
      all
      Registrable Securities for which it is required to be effective, or the Holders
      are not permitted to utilize the Prospectus therein to resell such Registrable
      Securities, for in any such case other than as provided in Section 6.7(b) (any
      such failure or breach being referred to as an “Event,”
      and
      the date of the occurrence of such breach or failure being an “Event
      Date”),
      then
      in addition to any other rights the Holder may have hereunder or under
      applicable law: (x) on the first monthly anniversary of such Event Date the
      Company shall pay to each Holder an amount in cash, as partial liquidated
      damages and not as a penalty, equal to 2.5% of the aggregate purchase price
      paid
      by such Holder pursuant to this Agreement for any Registrable Securities then
      held by such Holder; and (y) on each subsequent monthly anniversary of each
      such
      Event Date (if the applicable Event shall not have been cured by such date)
      until the applicable Event is cured, the Company shall pay to each Holder an
      amount in cash, as partial liquidated damages and not as a penalty, equal to
      2.5% of the aggregate purchase price paid by such Holder pursuant to this
      Agreement for any Registrable Securities then held by such Holder; provided,
      however, that in no event shall the sum of the partial liquidated damages
      payable pursuant to (x) and (y) exceed 20% of the aggregate purchase paid by
      such Holder pursuant to this Agreement for any Registrable Securities then
      held
      by such Holder. If the Company fails to pay any partial liquidated damages
      pursuant to this Section in full within seven days after the date payable,
      the
      Company will pay interest thereon at a rate of 10% per annum (or such lesser
      maximum amount that is permitted to be paid by applicable law) to the Holder,
      accruing daily from the date such partial liquidated damages are due until
      such
      amounts, plus all such interest thereon, are paid in full. The partial
      liquidated damages pursuant to the terms hereof shall apply on a daily pro-rata
      basis for any portion of a month prior to the cure of an Event.

    


    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    6.4    All
      Registration Expenses incurred in connection with any registration,
      qualification, exemption or compliance pursuant to Section 6.3 shall be borne
      by
      the Company. All Selling Expenses relating to the sale of securities registered
      by or on behalf of Holders shall be borne by such Holders.

    


    6.5    In
      the
      case of the registration, qualification, exemption or compliance effected by
      the
      Company pursuant to this Agreement, the Company shall, upon reasonable request,
      inform each Holder as to the status of such registration, qualification,
      exemption and compliance. At its expense the Company shall: 

    


    (a)    use
      its
      best efforts to keep such registration, and any qualification, exemption or
      compliance under state or federal securities laws which the Company determines
      to obtain, continuously effective until the termination of the Registration
      Period; and 

    


    (b)    advise
      the Holders as soon as practicable:

    


    (i)    when
      the
      Registration Statement or any amendment thereto has been filed with the SEC
      and
      when the Registration Statement or any post-effective amendment thereto has
      become effective;

    


    (ii)    of
      any
      request, following the effectiveness of the Registration Statement, by the
      SEC
      for amendments or supplements to the Registration Statement or the prospectus
      included therein or for additional information;

    


    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    (iii)   of
      the
      issuance by the SEC of any stop order suspending the effectiveness of the
      Registration Statement or the initiation of any proceedings for such
      purpose;

    


    (iv)    of
      the
      receipt by the Company of any notification with respect to the suspension of
      the
      qualification of the Registrable Securities included therein for sale in any
      jurisdiction or the initiation or threatening of any proceeding for such
      purpose; and

    


    (v)    of
      the
      happening of any event that requires the making of any changes in the
      Registration Statement or the prospectus so that, as of such date, the
      statements therein are not misleading and do not omit to state a material fact
      required to be stated therein or necessary to make the statements therein (in
      the case of the prospectus, in the light of the circumstances under which they
      were made) not misleading (which notice will be accompanied by an instruction
      to
      suspend the use of the prospectus until such changes have been
      made);

    


    (c)    make
      every commercially reasonable effort to obtain the withdrawal of any order
      suspending the effectiveness of any Registration Statement at the earliest
      possible time;

    


    (d)    furnish
      to each Holder, without charge, at least one copy of such Registration Statement
      and any post-effective amendment thereto, including financial statements and
      schedules, and, if the Holder so requests in writing, all exhibits (including
      those incorporated by reference) in the form filed with the SEC;

    


    (e)    during
      the Registration Period, deliver to each Holder, without charge, as many copies
      of the prospectus included in such Registration Statement and any amendment
      or
      supplement thereto as such Holder may reasonably request; and the Company
      consents to the use, consistent with the provisions hereof, of the prospectus
      or
      any amendment or supplement thereto by each of the selling Holders of
      Registrable Securities in connection with the offering and sale of the
      Registrable Securities covered by the prospectus or any amendment or supplement
      thereto. In addition, upon the reasonable request of the Holder and subject
      in
      all cases to confidentiality protections reasonably acceptable to the Company,
      the Company will meet with a Holder or a representative thereof at the Company’s
      principal office to discuss all information relevant for disclosure in the
      Registration Statement covering the Registrable Securities, and will otherwise
      cooperate with any Holder conducting an investigation for the purpose of
      reducing or eliminating such Holder’s exposure to liability under the Securities
      Act, including the reasonable production of information at the Company’s
      principal office;

    


    (f)    prior
      to
      any public offering of Registrable Securities pursuant to any Registration
      Statement, register or qualify or obtain an exemption for offer and sale under
      the securities or blue sky laws of such jurisdictions as any such Holders
      reasonably request in writing and do any and all other acts or things reasonably
      necessary or advisable to enable the offer and sale in such jurisdictions of
      the
      Registrable Securities covered by such Registration Statement; provided that
      the
      Company shall not for any such purpose be required to qualify generally to
      transact business as a foreign corporation in any jurisdiction where it is
      not
      so qualified or to consent to general service of process in any such
      jurisdiction;

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    (g)    upon
      the
      occurrence of any event contemplated by Section 6.5(b)(v) above, the Company
      shall promptly prepare a post-effective amendment to the Registration Statement
      or a supplement to the related prospectus, or file any other required document
      so that, as thereafter promptly delivered to purchasers of the Registrable
      Securities included therein, the prospectus will not include any untrue
      statement of a material fact or omit to state any material fact necessary to
      make the statements therein, in the light of the circumstances under which
      they
      were made, not misleading; 

    


    (h)    upon
      the
      submission by any Holder to the Company, its counsel or as instructed by Company
      counsel of (i) certificates representing Registrable Securities, (ii) a
      statement of such Holder that it intends to sell the Registrable Securities
      evidenced by such certificates in accordance with the plan of distribution
      set
      forth in the Registration Statement, and (iii) a request that the Registrable
      Securities evidenced by such certificates be issued free of restrictive legend
      then, subject to the continued effectiveness of the Registration Statement
      in
      accordance with the terms hereof, cause Company counsel to deliver to the
      Company’s transfer agent instructions to issue certificates evidencing such
      Registrable Securities free of restrictive legend; 

    


    (i)    comply
      in
      all material respects with all applicable rules and regulations of the SEC,
      and
      make generally available to its security holders not later than 45 days (or
      90
      days if the fiscal quarter is the fourth fiscal quarter) after the end of its
      fiscal quarter in which the first anniversary date of the effective date of
      the
      Registration Statement occurs, an earnings statement satisfying the provisions
      of Section 11(a) of the Securities Act; and

    


    (j)    cause
      the
      Registrable Securities to be included for listing and trading on the Nasdaq
      Stock Market or any other exchange on which the Company’s Common Stock is then
      listed for trading.

     

    6.6    (a)    To
      the
      extent permitted by law, the Company shall indemnify each Holder, each
      underwriter of the Registrable Securities and each person controlling such
      Holder within the meaning of Section 15 of the Securities Act, with respect
      to
      which any registration, qualification or compliance has been effected pursuant
      to this Agreement, against all claims, losses, damages and liabilities (or
      action in respect thereof), including any of the foregoing incurred in
      settlement of any litigation, commenced or threatened (subject to Section 6.6(c)
      below), arising out of or based on any untrue statement (or alleged untrue
      statement) of a material fact contained in the Registration Statement, or any
      amendment or prospectus relating thereto, incident to any such registration,
      qualification or compliance, or based on any omission (or alleged omission)
      to
      state therein a material fact required to be stated therein or necessary to
      make
      the statements therein not misleading, in light of the circumstances in which
      they were made, and will reimburse each Holder, each underwriter of the
      Registrable Securities and each person controlling such Holder, for reasonable
      legal and other expenses reasonably incurred in connection with investigating
      or
      defending any such claim, loss, damage, liability or action as incurred;
      provided that the Company will not be liable in any such case to the extent
      that
      any untrue statement or omission or allegation thereof is made in reliance
      upon
      and in conformity with written information furnished to the Company by or on
      behalf of such Holder and stated to be specifically for use in preparation
      of
      such registration statement or prospectus; provided, further, that the Company
      will not be liable in any such case where the claim, loss, damage or liability
      arises out of or is related to the failure of the Holder to comply with its
      covenants and agreements contained in this Agreement respecting sales of
      Registrable Securities.

    


    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    (b)    Each
      Holder will severally, if Registrable Securities held by such Holder are
      included in the securities as to which such registration, qualification or
      compliance is being effected, indemnify the Company, each of its directors
      and
      officers, each underwriter of the Registrable Securities and each person who
      controls the Company within the meaning of Section 15 of the Securities
      Act, against all claims, losses, damages and liabilities (or actions in respect
      thereof), including any of the foregoing incurred in settlement of any
      litigation, commenced or threatened (subject to Section 6.6(c) below), arising
      out of or based on any untrue statement (or alleged untrue statement) of a
      material fact contained in any registration statement, or any amendment or
      prospectus relating thereto, incident to any such registration, qualification
      or
      compliance, or based on any omission (or alleged omission) to state therein
      a
      material fact required to be stated therein or necessary to make the statements
      therein not misleading, in light of the circumstances in which they were made,
      and will reimburse the Company, such directors and officers, each underwriter
      of
      the Registrable Securities and each person controlling the Company for
      reasonable legal and any other expenses reasonably incurred in connection with
      investigating or defending any such claim, loss, damage, liability or action
      as
      incurred, in each case to the extent, but only to the extent, that such untrue
      statement or omission or allegation thereof is made in reliance upon and in
      conformity with written information furnished to the Company by or on behalf
      of
      the Holder and stated to be specifically for use in preparation of such
      registration statement or prospectus; provided that the indemnity shall not
      apply to the extent that such claim, loss, damage or liability results from
      the
      fact that a current copy of the prospectus was not made available to the Holder
      and such current copy of the prospectus would have cured the defect giving
      rise
      to such loss, claim, damage or liability. Notwithstanding the foregoing, in
      no
      event shall a Holder be liable for any such claims, losses, damages or
      liabilities in excess of the net proceeds received by such Holder in the
      offering, except in the event of fraud by such Holder.

    


    (c)    Each
      party entitled to indemnification under this Section 6.6 (the “Indemnified
      Party”) shall give notice to the party required to provide indemnification (the
“Indemnifying Party”) promptly after such Indemnified Party has actual knowledge
      of any claim as to which indemnity may be sought, and shall permit the
      Indemnifying Party to assume the defense of any such claim or any litigation
      resulting therefrom, provided that (i) counsel for the Indemnifying Party,
      who
      shall conduct the defense of such claim or litigation, shall be approved by
      the
      Indemnified Party (whose approval shall not unreasonably be withheld); (ii)
      there shall not, in the reasonable opinion of counsel for the Indemnified Party,
      exist a material conflict on a material issue between the position of the
      Indemnified Party and the Indemnifying Party; and (iii) the Indemnifying Party
      shall provide reasonable assurance to the Indemnified Party of its financial
      capacity to defend and provide indemnification with respect to such claim.
      The
      Indemnified Party may participate in such defense at such Indemnified Party’s
      expense. Failure of any Indemnified Party to give notice as provided herein
      shall not relieve the Indemnifying Party of its obligations under this
      Agreement, unless such failure is materially prejudicial to the Indemnifying
      Party in defending such claim or litigation. An Indemnifying Party shall not
      be
      liable for any settlement of an action or claim effected without its written
      consent (which consent will not be unreasonably withheld).

    


    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    (d)    If
      the
      indemnification provided for in this Section 6.6 is held by a court of competent
      jurisdiction to be unavailable to an Indemnified Party with respect to any
      loss,
      liability, claim, damage or expense referred to therein, then the Indemnifying
      Party, in lieu of indemnifying such Indemnified Party thereunder, shall
      contribute to the amount paid or payable by such Indemnified Party as a result
      of such loss, liability, claim, damage or expense in such proportion as is
      appropriate to reflect the relative fault of the Indemnifying Party on the
      one
      hand and of the Indemnified Party on the other in connection with the statements
      or omissions which resulted in such loss, liability, claim, damage or expense
      as
      well as any other relevant equitable considerations. The relative fault of
      the
      Indemnifying Party and of the Indemnified Party shall be determined by reference
      to, among other things, whether the untrue or alleged untrue statement of a
      material fact or the omission to state a material fact relates to information
      supplied by the Indemnifying Party or by the Indemnified Party and the parties’
      relative intent, knowledge, access to information and opportunity to correct
      or
      prevent such statement or omission. Notwithstanding the foregoing, in no event
      shall a Holder be liable for any such claims, losses, damages or liabilities
      pursuant to this Section 6.6(d) in excess of the net proceeds received by such
      Holder in the Offering, except in the event of fraud by such
      Holder.

    


    6.7    (a)    Each
      Holder agrees that, upon receipt of any notice from the Company of the happening
      of any event requiring the preparation of a supplement or amendment to a
      prospectus relating to Registrable Securities so that, as thereafter delivered
      to the Holders, such prospectus shall not contain an untrue statement of a
      material fact or omit to state any material fact required to be stated therein
      or necessary to make the statements therein not misleading, each Holder will
      forthwith discontinue disposition of Registrable Securities pursuant to the
      registration statement contemplated by Section 6.3 until its receipt of copies
      of the supplemented or amended prospectus from the Company, such prospectus
      to
      be forwarded promptly to the Holder by the Company, and, if so directed by
      the
      Company, each Holder shall deliver to the Company all copies, other than
      permanent file copies then in such Holder’s possession, of the prospectus
      covering such Registrable Securities current at the time of receipt of such
      notice.

    


    (b)    Each
      Holder shall suspend, upon request of the Company, any disposition of
      Registrable Securities pursuant to the Registration Statement and prospectus
      contemplated by Section 6.3 during (i) any period, not to exceed
      one
      30-day period within any one 12-month period, the Company requires in connection
      with a primary underwritten offering of equity securities and (ii) any
      period, not to exceed two 30-day periods within any one 12-month period, when
      the Company determines in good faith that offers and sales pursuant thereto
      should not be made by reason of the presence of material undisclosed
      circumstances or developments with respect to which the disclosure that would
      be
      required in such a prospectus is premature, would have an adverse effect on
      the
      Company or is otherwise inadvisable and provided that all Holders and all
      holders of registration rights in respect of capital stock of the Company are
      similarly bound.

    


    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    (c)    As
      a
      condition to the inclusion of its Registrable Securities, each Holder shall
      furnish to the Company such information regarding such Holder and the
      distribution proposed by such Holder as the Company may reasonably request
      in
      writing or as shall be required in connection with any registration,
      qualification or compliance referred to in this Article 6, including the
      information required by the Registration Questionnaire attached hereto as
      Appendix A.

    


    (d)    Each
      Holder hereby covenants with the Company that it will (i) not sell any
      Registrable Securities under the Registration Statement until it has received
      copies of the Prospectus as then amended or supplemented as contemplated in
      Section 6.5(e) and notice from the Company that such Registration Statement
      and
      any post-effective amendments thereto have become effective, and (ii) not make
      any sale of the Registrable Securities without effectively causing the
      prospectus delivery requirements under the Securities Act to be
      satisfied.

    


    (e)    Each
      Holder agrees not to take any action with respect to any distribution deemed
      to
      be made pursuant to such Registration Statement which would constitute a
      violation of Regulation M under the Exchange Act or any other applicable rule,
      regulation or law.

    


    (f)    At
      the
      end of the Registration period, the Holders of Registrable Securities included
      in the Registration Statement shall discontinue sales of shares pursuant to
      such
      Registration Statement and shall be eligible to sell such shares pursuant to
      Rule 144(k). 

    


    6.8    With
      a
      view to making available to the Holders the benefits of certain rules and
      regulations of the SEC which at any time permit the sale of the Registrable
      Securities to the public without registration, the Company shall use its
      reasonable best efforts to:

    


    (a)    make
      and
      keep public information available, as those terms are understood and defined
      in
      Rule 144 under the Securities Act, at all times;

    


    (b)    file
      with
      the SEC in a timely manner all reports and other documents required of the
      Company under the Exchange Act; and 

    


    (c)    so
      long
      as a Holder owns any unregistered Registrable Securities, furnish to such
      Holder, upon any reasonable request, a written statement by the Company as
      to
      its compliance with Rule 144 under the Securities Act, and of the Exchange
      Act, a copy of the most recent annual or quarterly report of the Company, and
      such other reports and documents of the Company as such Holder may reasonably
      request in availing itself of any rule or regulation of the SEC allowing a
      Holder to sell any such securities without registration.

    


    6.9    The
      rights to cause the Company to register Registrable Securities granted to the
      Holders by the Company under Section 6.2 may be assigned in full or
      in part
      by a Holder in connection with a transfer by such Holder of its Registrable
      Securities, provided, however, that (i) such transfer may otherwise
      be
      effected in accordance with applicable securities laws (and the Company may
      require an opinion of Holder’s counsel with respect thereto); (ii) such
      Holder gives prior written notice to the Company; and (iii) such transferee
      (x)
      delivers to the Company a Registration Questionnaire in the form attached as
      Appendix A, (y) agrees to comply with the terms and provisions of this
      Agreement, and (z) such transfer is otherwise in compliance with this
      Agreement. 

    


    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    6.10    The
      Company shall use commercially reasonable best efforts to cause all Registrable
      Securities covered by a Registration Statement to be listed on each securities
      exchange, interdealer quotation system or other market on which similar
      securities issued by the Company are then listed.

    


    6.11    With
      the
      written consent of the Company and the Holders holding at least a majority
      of
      the Registrable Securities that are then outstanding, any provision of this
      Article 6 may be waived (either generally or in a particular instance, either
      retroactively or prospectively and either for a specified period of time or
      indefinitely) or amended provided that such waiver or amendment shall apply
      to
      all Holders similarly. Upon the effectuation of each such waiver or amendment,
      the Company shall promptly give written notice thereof to the Holders, if any,
      who have not previously received notice thereof or consented thereto in
      writing.

    


    7.    MISCELLANEOUS.

    


    7.1    All
      notices, requests and other communications under this Agreement shall be in
      writing, and shall be deemed given if delivered to the addressees in person
      or
      by recognized overnight courier, mailed by certified or registered mail, return
      receipt requested, or by facsimile or e-mail transmission, as follows:


    


    
      	 	
              If
                to the Company:

            	
              Netsmart
                Technologies, Inc.

            
	 	 	
              3500
                Sunrise Highway, Suite D122

            
	 	 	
              Great
                River, NY 11739

            
	 	 	
              Attention:
                James L. Conway, Chief Executive Officer

            
	 	 	
              Facsimile:
                631-968-2123

            
	 	 	
              Email:
                jconway@csmcorp.com 

            


    

    


    If
      to a
      Subscriber, at such address as such Subscriber shall have provided in writing
      to
      the Company or such other addresses as such Subscriber furnishes by notice
      given
      in accordance with this Section 7.1 or
      such
      other address as may be designated in writing hereafter, in the same manner,
      by
      such person. 

    


    7.2    Except
      as
      provided in Section 6.10 above, this Agreement shall not be changed, modified
      or
      amended except by a writing signed by the parties to be charged, and this
      Agreement may not be discharged except by performance in accordance with its
      terms or by a writing signed by the party to be charged.

    


    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    7.3    Subject
      to the provisions of Section 6.9, this Agreement shall be binding upon and
      inure
      to the benefit of the parties hereto and to their respective heirs, legal
      representatives, successors and assigns. This Agreement sets forth the entire
      agreement and understanding between the parties as to the subject matter hereof
      and merges and supersedes all prior discussions, agreements and understandings
      of any and every nature among them.

    


    7.4    Upon
      the
      execution and delivery of this Agreement by the Subscriber, this Agreement
      shall
      become a binding obligation of the Subscriber with respect to the purchase
      of
      the Securities as herein provided; subject, however, to the right hereby
      reserved to the Company to reject this subscription in accordance with Section
      2.15, enter into the same agreements with other subscribers and to add and/or
      delete other persons as subscribers. 

    


    7.5    Notwithstanding
      the place where this Agreement may be executed by any of the parties hereto,
      the
      parties expressly agree that all the terms and provisions hereof shall be
      construed in accordance with and governed by the laws of the State of New York
      without regard to principles of conflicts of law. 

    


    7.6    The
      holding of any provision of this Agreement to be invalid or unenforceable by
      a
      court of competent jurisdiction shall not affect any other provision of this
      Agreement, which shall remain in full force and effect. If any provision of
      this
      Agreement shall be declared by a court of competent jurisdiction to be invalid,
      illegal or incapable of being enforced in whole or in part, such provision
      shall
      be interpreted so as to remain enforceable to the maximum extent permissible
      consistent with applicable law and the remaining conditions and provisions
      or
      portions thereof shall nevertheless remain in full force and effect and
      enforceable to the extent they are valid, legal and enforceable, and no
      provisions shall be deemed dependent upon any other covenant or provision unless
      so expressed herein.

    


    7.7    It
      is
      agreed that a waiver by either party of a breach of any provision of this
      Agreement shall not operate, or be construed, as a waiver of any subsequent
      breach by that same party.

    


    7.8    The
      parties agree to execute and deliver all such further documents, agreements
      and
      instruments and take such other and further action as may be necessary or
      appropriate to carry out the purposes and intent of this Agreement.

    


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

    


    7.10   (a)    The
      Subscribers severally agree not to issue any public statement with respect
      to
      the Subscribers’ investment or proposed investment in the Company or the terms
      of any agreement or covenant between them and the Company without the Company’s
      prior written consent, except such disclosures as may be required under
      applicable law or under any applicable order, rule or regulation.

    


    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    (b)    The
      Company agrees not to issue any public statement with respect to the
      Subscribers’ investment or proposed investment in the Company or the terms of
      any agreement or covenant between them and the Company or to disclose the names,
      addresses or any other information about the Subscribers, except as required
      by
      applicable law or under any applicable order, rule or regulation and to satisfy
      its obligations under Section 6.

    


    7.11    The
      Subscriber represents and warrants that it has not engaged, consented to nor
      authorized any broker, finder or intermediary to act on its behalf, directly
      or
      indirectly, as a broker, finder or intermediary in connection with the
      transactions contemplated by this Agreement. Subscriber hereby severally agrees
      to indemnify and hold harmless the Company from and against all fees,
      commissions or other payments owing to any such person or firm acting on behalf
      of such Subscriber hereunder.

     

    7.12    Nothing
      in this Agreement shall create or be deemed to create any rights in any person
      or entity not a party to this Agreement, except for the holders of Registrable
      Securities.

    


    [REMAINDER
      OF PAGE LEFT BLANK - ARTICLE 8 FOLLOWS]

    


    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    
8.    CONFIDENTIAL
      INVESTOR QUESTIONNAIRE.

    


    8.1    The
      Subscriber represents and warrants that he, she or it comes within one category
      marked below, and that for any category marked, he, she or it has truthfully
      set
      forth, where applicable, the factual basis or reason the Subscriber comes within
      that category. ALL INFORMATION IN RESPONSE TO THIS SECTION WILL BE KEPT STRICTLY
      CONFIDENTIAL except as otherwise required by law. The undersigned agrees to
      furnish any additional information which the Company deems necessary in order
      to
      verify the answers set forth below.

     

    
      
        	
                Category
                  A ___

              	
                The
                  undersigned is an individual (not a partnership, corporation, etc.)
                  whose
                  individual net worth, or joint net worth with his or her spouse,
                  presently
                  exceeds $1,000,000.

              
	 	 
	 	
                Explanation:
                  In calculating net worth you may include equity in personal property
                  and
                  real estate, including your principal residence, cash, short-term
                  investments, stock and securities. Equity in personal property
                  and real
                  estate should be based on the fair market value of such property
                  less debt
                  secured by such property.

              
	 	 
	
                Category
                  B ___

              	
                The
                  undersigned is an individual (not a partnership, corporation, etc.)
                  who
                  had an income in excess of $200,000 in each of the two most recent
                  years,
                  or joint income with his or her spouse in excess of $300,000 in
                  each of
                  those years (in each case including foreign income, tax exempt
                  income and
                  full amount of capital gains and losses but excluding any income
                  of other
                  family members and any unrealized capital appreciation) and has
                  a
                  reasonable expectation of reaching the same income level in the
                  current
                  year.

              
	 	 
	
                Category
                  C ___

              	
                The
                  undersigned is a director or executive officer of the Company which
                  is
                  issuing and selling the Securities.

              
	 	 
	
                Category
                  D ___

              	
                The
                  undersigned is a bank; a savings and loan association; insurance
                  company;
                  registered investment company; registered business development
                  company;
                  licensed small business investment company (“SBIC”); or employee benefit
                  plan within the meaning of Title 1 of ERISA and (a) the investment
                  decision is made by a plan fiduciary which is either a bank, savings
                  and
                  loan association, insurance company or registered investment advisor,
                  or
                  (b) the plan has total assets in excess of $5,000,000 or (c) is
                  a self
                  directed plan with investment decisions made solely by persons
                  that are
                  accredited investors. (describe entity)

              
	 	 
	 	 
	 	 


      

    

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

     

    

      
        	
                Category
                  E ___

              	
                The
                  undersigned is a private business development company as defined
                  in
                  section 202(a)(22) of the Investment Advisors Act of 1940. (describe
                  entity) 

              
	 	
                 

              
	 	
                 

              
	 	     

	 	 
	
                Category
                  F ___

              	
                The
                  undersigned is either a corporation, partnership, Massachusetts
                  business
                  trust, or non-profit organization within the meaning of Section
                  501(c)(3)
                  of the Internal Revenue Code, in each case not formed for the specific
                  purpose of acquiring the Securities and with total assets in excess
                  of
                  $5,000,000.(describe entity)

              
	 	
                 

              
	 	 
	 	 
	 	 
	
                Category
                  G ___

              	
                The
                  undersigned is a trust with total assets in excess of $5,000,000,
                  not
                  formed for the specific purpose of acquiring the Securities, where
                  the
                  purchase is directed by a “sophisticated investor“ as defined in
                  Regulation 506(b)(2)(ii) under the Securities Act.

              
	 	 
	
                Category
                  H ___

              	
                The
                  undersigned is an entity (other than a trust) in which all of the
                  equity
                  owners are “accredited investors” within one or more of the above
                  categories. If relying upon this Category alone, each equity owner
                  must
                  complete a separate copy of this Agreement. (describe
                  entity)

              
	 	
                 

              


      

       

    

    The
      undersigned agrees that the undersigned will notify the Company at any time
      on
      or prior to the Closing Date in the event that the representations and
      warranties in this Section 8 shall cease to be true, accurate and
      complete.

    


    8.2    SUITABILITY
      (please
      answer each question)

    


    (a)  For
      an individual
      Subscriber, please describe your current employment, including the company
      by
      which you are employed and its principal business:

     

    
      
        

      

    

    
       

      
        

      

       

      
        

      

       

      
        

      

    

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

    


    (b)    For
      an
      individual Subscriber, please describe any college or graduate degrees held
      by
      you:

    
       

      
        

      

    

     

    
      

    

     

    
      
        

      

      
         

        
          

        

      

    

     

    (c)    For
      all
      Subscribers, please state whether you have you participated in other private
      placements:

    


    YES_______   NO_______

    


    (d)    If
      your
      answer to question (d) above was “YES”, please indicate frequency of such prior
      participation in private placements of:

        


    
      
        	 	
                Public

              	
                Private

              
	 	
                Companies

              	
                Companies

              
	 	 	 
	
                Frequently

              	___________	___________
	
                Occasionally

              	___________	___________


      



    (e)    For
      individual Subscribers, do you expect your current level of income to
      significantly decrease in the foreseeable future:

    


    YES_______   NO_______

    


    (f)    For
      trust,
      corporate, partnership and other institutional Subscribers, do you expect your
      total assets to significantly decrease in the foreseeable future: 

    


    YES_______   NO_______

    


    (g)    For
      all
      Subscribers, do you have any other investments or contingent liabilities which
      you reasonably anticipate could cause you to need sudden cash requirements
      in
      excess of cash readily available to you: 

    


    YES_______   NO_______

    


    (h)    For
      all
      Subscribers, are you familiar with the risk aspects and the non-liquidity of
      investments such as the securities for which you seek to subscribe?

    


    YES_______   NO_______


    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

    


    (i)    For
      all
      Subscribers, do you understand that there is no guarantee of financial return
      on
      this investment and that you run the risk of losing your entire
      investment?

    


    YES_______   NO_______

    


    8.3    MANNER
      IN WHICH TITLE IS TO BE HELD.
      (circle
      one)

    

      
        	 	
                (a)

              	
                Individual
                  Ownership

              
	 	 	 
	 	
                (b)

              	
                Community
                  Property

              
	 	 	 
	 	
                (c)

              	
                Joint
                  Tenant with Right of 

                Survivorship
                  (both parties 

                must
                  sign)

              
	 	 	 
	 	
                (d)

              	
                Partnership*

              
	 	 	 
	 	
                (e)

              	
                Tenants
                  in Common

              
	 	 	 
	 	
                (f)

              	
                Company*

              
	 	 	 
	 	
                (g)

              	
                Trust*

              
	 	 	 
	 	
                (h)

              	
                Other

              


      

       

    

    *If
      Securities are being subscribed for by an entity, the attached Certificate
      of
      Signatory must also be completed.

    


    8.4    NASD
      AFFILIATION.

    


    Are
      you
      affiliated or associated with an NASD member firm (please check
      one):

    


    Yes
      _________  No
      __________

    


    If
      Yes,
      please describe:

    _________________________________________________________

    _________________________________________________________

    _________________________________________________________

    


    *If
      Subscriber is a Registered Representative with an NASD member firm, have the
      following acknowledgment signed by the appropriate party:

    


    The
      undersigned NASD member firm acknowledges receipt of the notice required by
      Article 3, Sections 28(a) and (b) of the Rules of Fair Practice.

    


    _________________________________

    Name
      of
      NASD Member Firm

    


    By:
      ______________________________

    Authorized
      Officer

    


    Date:
      ____________________________

    


    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    8.5 The
      undersigned is informed of the significance to the Company of the foregoing
      representations and answers contained in the Confidential Investor Questionnaire
      contained in this Section 8 and such answers have been provided under the
      assumption that the Company will rely on them.

    


    For
      Residents of New York:

    


    THE
      UNDERSIGNED NEW YORK STATE RESIDENT UNDERSTANDS THAT THIS OFFERING HAS NOT
      BEEN
      REVIEWED BY THE ATTORNEY GENERAL OF THE STATE OF NEW YORK BECAUSE OF THE
      OFFEROR'S REPRESENTATIONS THAT THIS IS INTENDED TO BE A NON-PUBLIC OFFERING
      PURSUANT TO SEC REGULATION D, AND THAT IF ALL OF THE CONDITIONS AND LIMITATIONS
      OF THE SEC REGULATION ARE NOT COMPLIED WITH, THE OFFERING WILL BE RESUBMITTED
      TO
      THE ATTORNEY GENERAL FOR AMENDMENT EXEMPTION. I UNDERSTAND THAT ANY OFFERING
      LITERATURE USED IN CONNECTION WITH THIS OFFERING HAS NOT BEEN PRE-FILED WITH
      THE
      ATTORNEY GENERAL AND HAS NOT BEEN REVIEWED BY THE ATTORNEY GENERAL .


    


    THE
      INTERESTS ARE BEING PURCHASED FOR MY OWN ACCOUNT FOR INVESTMENT, AND NOT FOR
      DISTRIBUTION OR RESALE TO OTHERS. I AGREE THAT I WILL NOT SELL OR OTHERWISE
      TRANSFER THESE SECURITIES UNLESS THEY ARE REGISTERED UNDER THE FEDERAL
      SECURITIES ACT OF 1933 OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS
      AVAILABLE. I REPRESENT THAT I HAVE ADEQUATE MEANS OF PROVIDING FOR MY CURRENT
      NEEDS AND POSSIBLE PERSONAL CONTINGENCIES, AND THAT I HAVE NO NEED FOR LIQUIDITY
      OF THIS INVESTMENT.

    


    IT
      IS
      UNDERSTOOD THAT ALL DOCUMENTS, RECORDS AND BOOKS PERTAINING TO THIS INVESTMENT
      HAVE BEEN MADE AVAILABLE FOR INSPECTION BY MY ATTORNEY AND/OR MY ACCOUNTANT
      AND/OR MY OFFEREE REPRESENTATIVE AND MYSELF, AND THAT THE BOOKS AND RECORDS
      OF
      THE ISSUER WILL BE AVAILABLE UPON REASONABLE NOTICE, FOR INSPECTION BY INVESTORS
      AT REASONABLE HOURS AT ITS PRINCIPAL PLACE OF BUSINESS.

    
 

    


    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK

    SIGNATURE
      PAGE TO FOLLOW]

    


    


    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    



    [Signature
      Page]

    


    $_____________________
      

     Dollars
      Invested 

    

      
        	 	 	 
	
                Signature

              	 	
                Signature
                  (if purchasing jointly)

              
	 	 	 
	 	 	 
	
                Name
                  Typed or Printed

              	 	
                Name
                  Typed or Printed

              
	 	 	 
	 	 	 
	
                Entity
                  Name

              	 	
                Entity
                  Name

              
	 	 	 
	 	 	 
	
                Address

              	 	
                Address

              
	 	 	 
	 	 	 
	
                City,
                  State and Zip Code

              	 	
                City,
                  State and Zip Code

              
	 	 	 
	 	 	 
	
                Telephone-Business

              	 	
                Telephone--Business

              
	 	 	 
	 	 	 
	
                Telephone-Residence

              	 	
                Telephone--Residence

              
	 	 	 
	 	 	 
	
                Facsimile-Business

              	 	
                Facsimile--Business

              
	 	 	 
	 	 	 
	
                Facsimile-Residence

              	 	
                Facsimile—Residence

              
	 	 	 
	 	 	 
	
                Email
                  Address

              	 	
                Email
                  Address 

              
	 	 	 
	 	 	 
	
                Tax
                  ID # or Social Security # 

              	 	
                Tax
                  ID # or Social Security # 

              
	 	 	 
	 	 	 
	
                Name
                  in which securities should be issued:

              	 


      

    

     

    Dated: 
      __________________, 2005

    

      
        	
                INVESTORS:
                  

              	
                PLEASE
                  COMPLETE THE REGISTRATION QUESTIONNAIRE ATTACHED HERETO AS APPENDIX
                  A.

              


      

This
      Subscription Agreement is agreed to and accepted by the Company as of
      _____________, 2005.  

    


     

    NETSMART
      TECHNOLOGIES, INC.

     

    By:____________________________________

    Name:

    Title:


    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    CERTIFICATE
      OF SIGNATORY

    


    (To
      be
      completed if Securities are

    being
      subscribed for by an entity)

    


    


    I,____________________________,
      am the____________________________ of __________________________________________
      (the “Entity”).

    


    I
      certify
      that I am empowered and duly authorized by the Entity to execute and carry
      out
      the terms of the Subscription Agreement and to purchase and hold the Securities,
      and certify further that the Subscription Agreement has been duly and validly
      executed on behalf of the Entity and constitutes a legal and binding obligation
      of the Entity.

    


    IN
      WITNESS WHEREOF, I have set my hand this ______ day of _________________,
      2005.

    


    
      ________________________________________________________
(Signature)                     

    


    


    


    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

    APPENDIX
      A

    


    Netsmart
      Technologies, Inc.

    


    REGISTRATION
      QUESTIONNAIRE 

    FOR

    SELLING
      STOCKHOLDERS

    


    


    Name:
      ________________________________

    (Please
      Print)

    


    


    This
      questionnaire is intended to provide information for a registration statement
      (the “Registration Statement”) to be filed by Netsmart Technologies, Inc. (the
“Company”) covering the resale of the Shares and Warrant Shares acquired by you
      as contemplated by the accompanying Subscription Agreement. Please complete
      (attaching separate sheets if additional space is needed), date and sign this
      questionnaire and return it together with your completed subscription agreement.
      

    


    YOU
      MUST
      ANSWER EVERY QUESTION. If a question is inapplicable to you or your answer
      is in
      the negative, please so state by inserting “N/A.” If you are in doubt whether a
      particular question requires an affirmative response from you, please furnish
      full particulars so that those persons responsible for preparing the
      Registration Statement and Prospectus can determine whether any disclosure
      based
      on your answer is required. Information requested in this questionnaire is
      as of
      the date you complete the questionnaire, unless otherwise indicated. Your
      furnishing such information does not necessarily mean that such information
      will
      be disclosed.

    


    DEFINITIONS

    


    Your
      answers to this questionnaire should be made upon the basis of the following
      definitions of terms used in this questionnaire:

    


    The
      term
“beneficial
      owner”
      of a
      security includes any person who, directly or indirectly, through any contract,
      arrangement, understanding, relationship or otherwise has or shares
      (1) voting
      power,
      which
      includes the power to vote, or direct the voting of, such security or
      (2) investment
      power,
      which
      includes the power to dispose or direct the disposition of such security. A
      person may be regarded as having voting power of a security which is owned
      (i)
      by his spouse or minor children or by any of his relatives or his spouse’s
      relatives who share the same home with him, (ii) a partnership
      of
      which he is a partner or (iii) a corporation of which he is a substantial
      shareholder. A person is also deemed to be the beneficial owner of shares which
      that person has the right to acquire within 60 days, including but not limited
      to any right to acquire through the exercise of an option, through conversion
      of
      a security, pursuant to the power to revoke a trust or pursuant to the automatic
      termination of a trust. 

    


    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    

    The
      term
“material,”
      when
      used to qualify a requirement for the furnishings of information as to any
      subject, limits the information required to those matters about which the
      average prudent investor should reasonably be informed before buying or selling
      the securities of the Company. If you are in doubt as to the materiality of
      certain information, you should relate sufficient facts to enable the Company
      and its advisors to reach a conclusion as to its materiality.

    


    QUESTIONS

    


    QUESTION
      1:

    


    State
      your present position or positions with the Company (if any), including
      membership on any audit, personnel, compensation or similar committee or
      committees; any positions held by you during the previous three years; and
      any
      positions to which you have been elected or appointed but the duties of which
      you have not yet assumed. For each position, list the term or expected term
      of
      office.

    


    ANSWER:

    


    QUESTION
      2:

    


    Other
      than Shares and Warrant Shares that you will acquire in connection with the
      Offering,
      provide
      below information regarding the equity securities of the Company of which you
      are the “beneficial owner.”Please
      refer to the definition of “beneficial owner,” above.
      Under
      the column “Nature of Ownership,” please indicate amounts of securities for
      which you have (a) sole voting power, (b) shared voting power, (c) sole
      investment power, or (d) shared investment power. Also, if you hold more than
      5%
      of the Company’s securities pursuant to a voting trust or similar agreement,
      please separately state the amount of such securities held or to be held
      pursuant to the trust or agreement, the duration of the agreement and the names
      and addresses of the voting trustees, outlining briefly their voting rights
      and
      other powers under the trust or agreement. 

    


    ANSWER
      (attach additional pages if necessary):

    

      
        	
                Number
                  of

              	
                Nature
                  of

              	 
	
                Shares

              	
                Ownership

              	
                Title
                  of Securities

              


      

       

    

    
      
        
        

      

      
        A-2

        
          

        

      

      
        
        

      

    

    


    QUESTION
      3:

    


    If
      you
      plan to offer your shares of Common Stock through the selling efforts of brokers
      or dealers, describe the terms (and attach copies) of any agreement,
      arrangement, or understanding entered into with broker(s) or dealer(s),
      including volume limitations on sales, parties to the agreement and the
      conditions under which the agreement may be terminated. If known, identify
      the
      broker(s) or dealer(s), which will participate in the offering and state the
      amount to be offered through each.

    


    ANSWER:

    


    QUESTION
      4:

    


    Describe
      below any information known to you, and if none state “none,” pertaining to
      underwriting compensation and arrangements or any dealings between any
      underwriter or related person, member of the NASD or a person associated with
      a
      member of the NASD, and the Company or any controlling stockholder thereof
      since
      January 1, 2000.

     

    ANSWER:

    


    QUESTION
      5:

    


    State
      below whether you or any of your associates are a member of NASD, a controlling
      shareholder of a member, a person associated or affiliated with a member or
      an
      underwriter or related person with respect to the proposed offering. If you
      responded “yes,” describe such relationship:

    


    ANSWER:

     

    QUESTION
      6:

    


    Are
      you a
      broker-dealer or affiliated with a broker-dealer?

    


    ANSWER:

    


    Yes
      ______ No______

     

    
      
        
        

      

      
        A-3

        
          

        

      

      
        
        

      

    

     

    QUESTION
      7:

    


    If
      you
      are a broker-dealer or are affiliated with a broker-dealer, did you purchase
      the
      securities in the ordinary course of business?

    


    ANSWER:

    


    Yes
      ______ No______

    


    


    QUESTION
      8:

    


    If
      you
      are affiliated with a broker-dealer, did you have any agreements or
      understandings, directly or indirectly, with any person to distribute the
      securities at the time that you purchased the securities?

    


    ANSWER:

    


    Yes
      ______ No______

    


    


    Please
      note that the SEC takes the position that if you are a broker-dealer, you are
      to
      be identified in the Registration Statement as an underwriter. In the “Plan of
      Distribution,” the Registration Statement will provide substantially as
      follows:

    


    “The
      selling stockholders and any broker-dealers, agents or underwriters that
      participate with the selling stockholders in the distribution of the issued
      and
      outstanding shares of common stock or the shares of stock issuable upon exercise
      of warrants may be deemed to be "underwriters" within the meaning of the
      Securities Act, in which event any commissions received by these broker-dealers,
      agents or underwriters and any profits realized by the selling stockholders
      on
      the resales of the securities may be deemed to be underwriting commissions
      or
      discounts under the Securities Act. If the selling stockholders are deemed
      to be
      underwriters, the selling stockholders may be subject to certain statutory
      and
      regulatory liabilities, including liabilities imposed pursuant to Sections
      11,
      12 and 17 of the Securities Act and Rule 10b-5 under the Exchange
      Act.”

    


    
      
        
        

      

      
        A-4

        
          

        

      

      
        
        

      

    

     

    QUESTION
      9:

     

    Are
      there
      specific individuals who have voting or investment control over the securities?
      If you are an entity, you must answer “yes” to this question and identify such
      individual(s) by name below.

     

    ANSWER:

    


    Yes
      ______ No______

    


    If
      you
      answered “yes”, please list the names of such individuals: 

     

    
      

    

     

    
      

    

    


    The
      answers to the foregoing questions are true and correct to the best of the
      undersigned’s knowledge, information and belief. The undersigned agrees to
      promptly notify the Company in writing of (a) any transfer by you of your Shares
      or Warrants, (b) sales of common stock of the Company (giving the number of
      shares sold and the name of the broker-dealer used) and (c) any other changes
      in
      the answers to this questionnaire that should be made as a result of any
      material development occurring subsequent to the date hereof.

    


    Dated:
      ___________, 2005.

    


    


    


    ____________________________________

    Signature

     

    


    
      
        
        

      

      
        A-5

        
          

        

      

      
        
        

      

    

    



    APPENDIX
      B

    Form
      of Opinion of Counsel

    


    Counsel’s
      opinion shall be based on a customary review of the transaction documents,
      the
      Company’s charter and by-laws, all material contracts filed as exhibits to the
      Company’s filings with the Commission and the provisions of applicable law and
      shall be subject only to customary limitations and qualification. Such opinion
      shall be to substantially the following effect:

    


    1.    The
      Company is a corporation duly organized, validly existing and in good standing
      under the laws of the Delaware and has the requisite corporate power and
      authority to carry on its business as now conducted and to own its properties.
      The Company is duly qualified to do business as a foreign corporation and is
      in
      good standing in the State of New York

    


    2.    The
      Company has the corporate power and authority and has taken all requisite
      corporate action necessary for (i) the authorization, execution and delivery
      of
      the Subscription Agreements, (ii) the authorization of the performance of all
      obligations of the Company under the Subscription Agreements, and (iii) the
      authorization, issuance (or reservation for issuance) and delivery of the
      Securities. The Subscription Agreements constitute the legal, valid and binding
      obligations of the Company, enforceable against the Company in accordance with
      their terms, subject to bankruptcy, insolvency, fraudulent transfer,
      reorganization, moratorium and similar laws of general applicability, relating
      to or affecting creditors’ rights generally and equitable
      principles.

    


    3.    The
      Shares have been duly authorized and are validly issued, fully paid and
      nonassessable. Upon the due exercise of the Warrants, the Warrant Shares
      issuable upon such exercise will be duly authorized, validly issued, fully
      paid
      and non-assessable. The Company has reserved a sufficient number of shares
      of
      Common Stock for issuance upon the full exercise of the Warrants.

    


    4.    To
      our
      knowledge, no person is entitled to any preemptive right or right of first
      refusal with respect to the issuance of the Securities and to our knowledge,
      there are no outstanding preemptive or similar rights relating to the purchase
      of the Securities.

    


    5.    The
      execution, delivery and performance by the Company of the Subscription
      Agreements and the offer, issuance and sale of the Securities require no consent
      of, action by or in respect of, or filing with, any Person, governmental body,
      agency, or official known to us other than those that have been made or obtained
      which are in full force and effect and post-sale filings pursuant to applicable
      state and federal securities laws.

    


    6.    The
      execution, delivery and performance of the Subscription Agreements by the
      Company and the issuance and sale of the Securities does not and will not
      conflict with or result in a breach or violation of any of the terms and
      provisions of, or constitute a default under (i) the Company’s Certificate of
      Incorporation or Bylaws, (ii) any material statute, rule, regulation or order
      of
      any governmental agency or body or any court, domestic or foreign, known to
      us
      and having jurisdiction over the Company or any of its respective assets or
      properties, or (iii) any of the material agreements and instruments listed
      as an
      Exhibit to the Company’s SEC Reports.

    


    
      
        
        

      

      
        B-1

        
          

        

      

      
        
        

      

    

    7.    Except
      as
      described in the SEC Reports, to our knowledge there are no pending material
      actions, suits or proceedings against or affecting the Company.

    


    8.    Assuming
      the representations made by the Subscribers contained in Articles 2 and 8 of
      the
      Subscription Agreements are true and correct, the initial sale of the Securities
      and the issuance of the Warrant Shares as contemplated by the Subscription
      Agreements is exempt from the registration and prospectus delivery requirements
      of the Securities Act of 1933, as amended.

    


    


    


    
      
        
        

      

      
        B-2

        
          

        

      

      
        
        

      

    

    



    EXHIBIT
      W

     

    NETSMART
      TECHNOLOGIES, INC.

    COMMON
      STOCK WARRANT

    


    THIS
      WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
      (THE “ACT”),
      OR
      UNDER THE SECURITIES LAWS OF ANY STATE. THIS WARRANT IS SUBJECT TO RESTRICTIONS
      ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT
      PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THE ISSUER OF THIS WARRANT
      MAY
      REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER
      TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE
      ACT
      AND ANY APPLICABLE STATE SECURITIES LAWS. 

    


    This
      certifies that [
      ] (the
      “Holder”),
      or
      assigns, for value received, is entitled to purchase from Netsmart Technologies,
      Inc., a Delaware corporation (the “Company”),
      subject to the terms set forth below, a maximum of [
      ]
      fully-paid and nonassessable shares (subject to adjustment as provided herein)
      (the “Warrant
      Shares”)
      of the
      Company’s Common Stock, $.01 par value per share (the “Common
      Stock”),
      for
      cash at a price of $11.00 per share (subject to adjustment as provided herein)
      (the “Exercise
      Price”)
      at any
      time or from time to time up to and including 5:00 p.m. (Eastern Time) on
[
      ],
      2010
      (the “Expiration
      Date”),
      subject to the Company’s right to redeem this Warrant as described in Section 4
      hereof, upon surrender to the Company at its principal office (or at such other
      location as the Company may advise the Holder in writing) of this Warrant
      properly endorsed with the Form of Subscription attached hereto duly completed
      and signed and upon payment of the aggregate Exercise Price for the number
      of
      shares for which this Warrant is being exercised determined in accordance with
      the provisions hereof. The Exercise Price is subject to adjustment as provided
      in Section 3 of this Warrant. This Warrant is issued subject to the following
      terms and conditions:

     

    1.    Exercise,
      Issuance of Certificates.
      Subject
      to Section 4 hereof, the Holder may exercise this Warrant at any time or from
      time to time on or prior to the Expiration Date for all or any part of the
      Warrant Shares (but not for a fraction of a share) that may be purchased
      hereunder, as that number may be adjusted pursuant to Section 3 of this Warrant.
      The Company agrees that the Warrant Shares purchased under this Warrant shall
      be
      and are deemed to be issued to the Holder hereof as the record owner of such
      Warrant Shares as of the close of business on the date on which this Warrant
      shall have been surrendered, properly endorsed, the completed and executed
      Form
      of Subscription delivered, and payment made for such Warrant Shares (such date,
      a “Date
      of Exercise”).
      Certificates for the Warrant Shares so purchased, together with any other
      securities or property to which the Holder hereof is entitled upon such
      exercise, shall be delivered to the Holder hereof by the Company at the
      Company’s expense as soon as practicable after the rights represented by this
      Warrant have been so exercised, but in any event not later than three business
      days following the Date of Exercise. In case of a purchase of less than all
      the
      Warrant Shares which may be purchased under this Warrant, the Company shall
      cancel this Warrant and execute and deliver to the Holder hereof within a
      reasonable time a new Warrant or Warrants of like tenor for the balance of
      the
      Warrant Shares purchasable under the Warrant surrendered upon such purchase.
      Each stock certificate so delivered shall be registered in the name of such
      Holder and issued with a legend in substantially the form of the legend placed
      on the front of this Warrant. 

     

    
      
        
        

      

      
        W-1

        
          

        

      

      
        
        

      

    

    (a)    Subject
      to the Holder’s valid exercise of this Warrant in accordance with the preceding
      terms of this Section 1, the Company’s obligations to issue and deliver Warrant
      Shares in accordance with the terms hereof are absolute and unconditional,
      irrespective of any subsequent action or inaction by the Holder to enforce
      the
      same. Nothing herein shall limit a Holder’s right to pursue any other remedies
      available to it hereunder, at law or in equity including, without limitation,
      a
      decree of specific performance and/or injunctive relief with respect to the
      Company’s failure to timely deliver certificates representing shares of Common
      Stock upon exercise of the Warrant as required pursuant to the terms
      hereof.

     

    (b)    Payment
      of Exercise Price.
      The
      Holder shall pay the Exercise Price by delivering immediately available funds
      to
      the Company. 

     

    2.    Shares
      to be Fully Paid; Reservation of Shares.
      The
      Company covenants and agrees that all Warrant Shares, will, upon issuance,
      be
      duly authorized, validly issued, fully paid and nonassessable, and free of
      all
      preemptive rights, liens and encumbrances, except for restrictions on transfer
      provided for herein. The Company shall at all times reserve and keep available
      out of its authorized and unissued Common Stock, solely for the purpose of
      providing for the exercise of the rights to purchase all Warrant Shares granted
      pursuant to this Warrant, such number of shares of Common Stock as shall, from
      time to time, be sufficient therefor.

     

    3.    Adjustment
      of Exercise Price and Number of Shares.
      The
      Exercise Price and the total number of Warrant Shares shall be subject to
      adjustment from time to time upon the occurrence of certain events described
      in
      this Section 3.

     

    (a)    Subdivision
      or Combination of Stock.
      In the
      event the outstanding shares of the Company’s Common Stock shall be increased by
      a stock dividend payable in Common Stock, stock split, subdivision, or other
      similar transaction occurring after the date hereof into a greater number of
      shares of Common Stock, the Exercise Price in effect immediately prior to such
      subdivision shall be proportionately reduced and the number of Warrant Shares
      issuable hereunder proportionately increased. Conversely, in the event the
      outstanding shares of the Company’s Common Stock shall be decreased by reverse
      stock split, combination, consolidation, or other similar transaction occurring
      after the date hereof into a lesser number of shares of Common Stock, the
      Exercise Price in effect immediately prior to such combination shall be
      proportionately increased and the number of Warrant Shares issuable hereunder
      proportionately decreased.

     

    
      
        
        

      

      
        W-2

        
          

        

      

      
        
        

      

    

    (b)    Reclassification.
      If any
      reclassification of the capital stock of the Company or any reorganization,
      consolidation, merger, or any sale, lease, license, exchange or other transfer
      (in one transaction or a series of related transactions) of all or substantially
      all of the business and/or assets of the Company (the “Reclassification
      Events”)
      shall
      be effected in such a way that holders of Common Stock shall be entitled to
      receive stock, securities, or other assets or property, then, as a condition
      of
      such Reclassification Event, lawful and adequate provisions shall be made
      whereby the Holder hereof shall thereafter have the right to purchase and
      receive (in lieu of the shares of Common Stock of the Company immediately
      theretofore purchasable and receivable upon the exercise of the rights
      represented hereby) such shares of stock, securities, or other assets or
      property as may be issued or payable with respect to or in exchange for, the
      number of shares of such Common Stock immediately theretofore purchasable and
      receivable upon the exercise of the rights represented hereby. Upon any
      Reclassification Event, appropriate provision shall be made with respect to
      the
      rights and interests of the Holder of this Warrant to the end that the
      provisions hereof (including, without limitation, provisions for adjustments
      of
      the Exercise Price and of the number of Warrant Shares), shall thereafter be
      applicable, as nearly as practicable, to any shares of stock, securities, or
      assets thereafter deliverable upon the exercise hereof.

     

    (c)    Notice
      of Adjustment.
      Upon
      any adjustment of the Exercise Price or any increase or decrease in the number
      of Warrant Shares, the Company shall give written notice thereof, by first
      class
      mail postage prepaid, addressed to the registered Holder of this Warrant at
      the
      address of such Holder as shown on the books of the Company. The notice shall
      be
      prepared and signed by the Company’s Chief Financial Officer and shall state the
      Exercise Price resulting from such adjustment and the increase or decrease,
      if
      any, in the number of Warrant Shares purchasable at such adjusted Exercise
      Price
      upon the exercise of this Warrant, setting forth in reasonable detail the method
      of calculation and the facts upon which such calculation is based.

     

    (d)    Other
      Notices.
      In case
      at any time:

     

    (i)     any
      taking by the Company of a record of the holders of any class of securities
      for
      the purpose of determining the holders thereof who are entitled to receive
      any
      dividend on, or any right to subscribe for, purchase or otherwise acquire any
      shares of stock of any class or any other securities or property, or to receive
      any other right; 

     

    (ii)    any
      capital reorganization of the Company, any reclassification or recapitalization
      of the capital stock of the Company or any transfer of all or substantially
      all
      the assets of the Company to or consolidation or merger of the Company with
      or
      into any other Person; 

     

    (iii)   any
      voluntary or involuntary dissolution, liquidation or winding-up of the Company;
      or

     

    (iv)    any
      offer
      by the Company for subscription to the holders of the Common Stock of any
      additional shares of stock of any class or other rights; 

     

    
      
        
        

      

      
        W-3

        
          

        

      

      
        
        

      

    

    then
      and
      in each such event the Company will mail or cause to be mailed to the Holder
      of
      this Warrant a notice specifying (i) the date on which any such record is to
      be
      taken for the purpose of such dividend, distribution or right, and stating
      the
      amount and character of such dividend, distribution or right, (ii) the date
      on
      which any such reorganization, reclassification, recapitalization, transfer,
      consolidation, merger, dissolution, liquidation or winding-up is to take place,
      and the time, if any is to be fixed, as of which the holders of record of Common
      Stock shall be entitled to exchange their Common Stock for securities or other
      property deliverable on such reorganization, reclassification, recapitalization,
      transfer, consolidation, merger, dissolution, liquidation or winding-up, and
      (iii) the amount and character of any stock or other securities, or rights
      or
      options with respect thereto, proposed to be issued or granted, the date of
      such
      proposed issue or grant and the persons or class of persons to whom such
      proposed issue or grant is to be offered or made. Such notice shall also state
      that the action in question or the record date is subject to the effectiveness
      of a registration statement under the Securities Act or a favorable vote of
      stockholders, if either is required. Such notice shall be delivered at least
      20
      days prior to the date specified in such notice on which any such action is
      to
      be taken or the record date, whichever is earlier.

     

    4.    Redemption
      of Warrants.

    


    (a)    Redemption.
      This
      Warrant may be redeemed at the option of the Company, at any time after one
      (1)
      year from the date hereof, following a period of twenty (20) consecutive trading
      days during which the per share volume weighted average price (“VWAP”) of the
      Common Stock equals or exceeds $30 per share, upon notice as set forth in
      Section 4(b) hereof, and at a redemption price equal to one-tenth of one cent
      ($0.001) (the “Redemption
      Price”)
      for
      each Warrant Share purchasable under this Warrant; provided,
      however,
      that
      this Warrant may not be redeemed by the Company unless the resale of the Warrant
      Shares purchasable hereunder has been registered under the Securities Act of
      1933, as amended (the “Act”)
      or are
      otherwise freely tradable. For purposes of this Section, VWAP shall be
      determined with reference to the volume weighted closing sale price on the
      primary market on which the Common Stock is traded, as reported by UBS. This
      Warrant may be redeemed only if all Warrants of the Company issued
      contemporaneously with this Warrant in the Offering (as defined in the
      Subscription Agreement dated September ______, 2005 are concurrently redeemed).
      

    


    (b)    Notice
      of Redemption.
      In the
      case of any redemption of this Warrant, the Company shall give written notice
      of
      such redemption to the Holder hereof by first-class mail, postage prepaid,
      to
      the Holder’s last address of record with the Company, not less than thirty (30)
      days prior to the date fixed by the Company for redemption (such date, the
      “Redemption Date”). Any notice which is given in the manner herein provided
      shall be conclusively presumed to have been duly given, whether or not the
      Holder receives the notice. Each such notice shall specify the Redemption Date,
      the place of redemption and the aggregate Redemption Price, and shall state
      that
      payment of the Redemption Price will be made up on surrender of this Warrant
      at
      the place of redemption specified in such notice, and that if not exercised
      by
      the close of business on the Redemption Date, the exercise rights of the Warrant
      shall expire unless extended by the Company. Such notice shall also state the
      current Exercise Price and the Expiration Date of the Warrant, unless extended
      by the Company.

    


    
      
        
        

      

      
        W-4

        
          

        

      

      
        
        

      

    

    (c)    Payment
      of Redemption Price.
      If
      notice of redemption shall have been given as provided in Section 4(b), the
      Redemption Price shall, unless the Warrant is theretofore exercised pursuant
      to
      the terms hereof, become due and payable on the Redemption Date and at the
      place
      stated in such notice. After 5:00 p.m. (Eastern Time) on such Redemption Date,
      the exercise rights of this Warrant shall expire and this Warrant shall be
      null
      and void.

     

    5.    No
      Voting or Dividend Rights.
      Nothing
      contained in this Warrant shall be construed as conferring upon the Holder
      the
      right to vote or to consent to receive notice as a stockholder of the Company
      on
      any other matters or any rights whatsoever as a stockholder of the Company.
      No
      dividends or interest shall be payable or accrued in respect of this Warrant
      or
      the interest represented hereby or the Warrant Shares or other securities
      purchasable hereunder until, and only to the extent that, this Warrant shall
      have been exercised.

     

    6.    No
      Impairment. The
      Company shall not by any action including, without limitation, amending its
      certificate of incorporation or through any reorganization, transfer of assets,
      consolidation, merger, dissolution, issue or sale of securities or any other
      voluntary action, avoid or seek to avoid the observance or performance of any
      of
      the terms of this Warrant, but will at all times in good faith assist in the
      carrying out of all such terms and in the taking of all such actions as may
      be
      necessary or appropriate to protect the rights of Holder against impairment.
      Without limiting the generality of the foregoing, the Company will (a) not
      increase the par value of any shares of Common Stock receivable upon the
      exercise of this Warrant above the amount payable therefor upon such exercise
      immediately prior to such increase in par value, (b) take all such actions
      as
      may be necessary or appropriate in order that the Company may validly and
      legally issue fully paid and nonassessable shares of Common Stock upon the
      exercise of this Warrant, and (c) use its reasonable best efforts to obtain
      all
      such authorizations, exemptions or consents from any public regulatory body
      having jurisdiction thereof as may be necessary to enable the Company to perform
      its obligations under this Warrant. Upon the request of Holder, the Company
      will
      at any time during the period this Warrant is outstanding acknowledge in
      writing, in form satisfactory to Holder, the continuing validity of this Warrant
      and the obligations of the Company hereunder.  

     

     7.    Modification
      and Waiver.
      This
      Warrant and any provision hereof may be changed, waived, discharged, or
      terminated only by an instrument in writing signed by the party against whom
      enforcement of the same is sought. 

     

    8.    Notices.
      Any
      notice, request, or other document required or permitted to be given or
      delivered to the Holder hereof or the Company shall be delivered by hand or
      messenger or shall be sent by certified mail, postage prepaid, or by overnight
      courier to the Holder at its address as shown on the books of the Company or
      to
      the Company at its principal place of business or such other address as either
      may from time to time provide to the other. Each such notice or other
      communication shall be treated as effective or having been given: (i) when
      delivered if delivered personally, (ii) if sent by registered or certified
      mail, at the earlier of its receipt or three business days after the same has
      been registered or certified as aforesaid, or (iii) if sent by overnight
      courier, on the next business day after the same has been deposited with a
      nationally recognized courier service.

     

    
      
        
        

      

      
        W-5

        
          

        

      

      
        
        

      

    

    9.    Governing
      Law.
      This
      Warrant shall be construed and enforced in accordance with, and the rights
      of
      the parties shall be governed by, the laws of the State of New York applicable
      to contracts to be performed entirely within such State.

     

    10.   Lost
      or Stolen Warrant.
      Upon
      receipt of evidence reasonably satisfactory to the Company of the loss, theft,
      destruction, or mutilation of this Warrant and, in the case of any such loss,
      theft or destruction, upon receipt of an indemnity reasonably satisfactory
      to
      the Company, or in the case of any such mutilation, upon surrender and
      cancellation of such Warrant, the Company, at its expense, will make and deliver
      a new Warrant, of like tenor, in lieu of the lost, stolen, destroyed or
      mutilated Warrant.

     

    11.   Fractional
      Shares.
      No
      fractional shares shall be issued upon exercise of this Warrant. The Company
      shall, in lieu of issuing any fractional share, pay the Holder entitled to
      such
      fraction a sum in cash equal to such fraction (calculated to the nearest 1/100th
      of a share) multiplied by the then effective Exercise Price on the date the
      Form
      of Subscription is received by the Company.

     

    12.   Acknowledgement.
      Upon
      the request of the Holder, the Company will at any time during the period this
      Warrant is outstanding, acknowledge in writing, in form reasonably satisfactory
      to the Holder, the continued validity of this Warrant and the Company’s
      obligations hereunder.

     

    13.   Successors
      and Assigns.
      This
      Warrant and the rights evidenced hereby shall inure to the benefit of and be
      binding upon the successors of the Company and, subject to the terms of Section
      13, the successors and assigns of the Holder. The provisions of this Warrant
      are
      intended to be for the benefit of all Holders from time to time of this Warrant,
      and shall be enforceable by any such Holder.

     

    14.   Transfer.
      This
      Warrant shall be transferable only on the books of the Company maintained at
      its
      principal place of business, upon delivery thereof duly endorsed by the Holder
      or by its duly authorized attorney or representative or accompanied by proper
      evidence of succession, assignment or authority to transfer. Upon any
      registration of transfer, the Company shall execute and deliver a new Warrant
      to
      the person entitled thereto.

     

    15.   Payment
      of Taxes.
      The
      Company shall not be required to pay any tax or taxes which may be payable
      with
      respect to any transfer of the Warrant or the Warrant Shares.

     

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

     

    
      
        
        

      

      
        W-6

        
          

        

      

      
        
        

      

    

     

    * * *

    IN
      WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by
      its
      officer, thereunto duly authorized as of this [
      ]
      day of
[
      ],
      2005.

     

    Netsmart
      Technologies, Inc.,

     

    By:
      ______________________________________

     

    Name:
      ____________________________________

    


    Title:
      _____________________________________

    


    
 

    
      
        
        

      

      
        W-7

        
          

        

      

      
        
        

      

    

    



    FORM
      OF
      SUBSCRIPTION

     

    (To
      be
      signed only upon exercise of Warrant)

     

    To: Netsmart
      Technologies, Inc.

     

    The
      undersigned, the holder of the attached Common Stock Warrant, hereby elects
      to
      exercise the purchase right represented by such Warrant for, and to purchase
      thereunder,                                    1 
      shares
      of Common Stock of Netsmart Technologies, Inc. and
      such
      holder herewith
      makes payment of $_________.

     

    


    The
      undersigned requests that certificates for such shares be issued in the name
      of,
      and delivered to: 

    ______________________________________________________________________________

    whose
      address
      is:________________________________________________________________.

    
      DATED: 
        _____________________

    

    


    __________________________________________

    (Signature
      must conform in all respects to name of 

    Holder
      as
      specified on the face of the Warrant)

     

    Name:
      _____________________________________

     

    Title:
      ______________________________________

     

    
      
         

        ______________________________________

        1 Insert
          here the number of shares called for on the face of the Warrant (or, in
          the case
          of a partial exercise, the portion thereof as to which the Warrant is being
          exercised), in either case without making any adjustment for any stock
          or other
          securities or property or cash which, pursuant to the adjustment provisions
          of
          the Warrant, may be deliverable upon exercise.

         

        
          
            
            

          

          
            W-8

            
              

            

          

          
            
            

          

        

      

    

     

    
      AMENDMENT
        TO SUBSCRIPTION AGREEMENT

      


      THIS
        AMENDMENT TO SUBSCRIPTION AGREEMENT (this “Agreement”) made as of the date set
        forth on the signature page hereof between Netsmart Technologies, Inc., a
        Delaware corporation, having its principal office at 3500 Sunrise Highway,
        Suite
        D122, Great River, NY 11739 (the “Company”), and the undersigned (the
“Subscriber”).

      


      W
        I T N E
        S S E T H:

      


      WHEREAS,
        the Company offered (the “Offering”) to a limited number of “accredited
        investors,” as such term is defined in Rule 501 of Regulation D under the
        Securities Act of 1933, as amended (the “Securities Act”), shares (the “Shares”)
        of its Common Stock, par value $.01 per share (“Common Stock”), and, in addition
        to the Shares, a 5-year warrant (the “Warrant”) to purchase, for an initial
        exercise price of $11 per share, 1 share of Common Stock for every 4 Shares
        purchased in the Offering (the “Warrant Shares”). (The Shares and the Warrant to
        be purchased, sometimes collectively referred to as a “Unit” and such Shares,
        Warrants and the Warrant Shares are collectively referred to herein as the
        “Securities”); and 

      


      WHEREAS,
        pursuant to a subscription agreement dated as of September 19, 2005 (the
        “Subscription Agreement”), the Subscriber subscribed for Securities in the
        Offering, which subscription was accepted by the Company; 

      


      WHEREAS,
        the Company now desires that Subscriber reduce the number of Units for which
        it
        subscribed in the Offering and, in consideration for a reduction in the price
        of
        the Units and the execution and delivery of a Participation Agreement of
        even
        date, Subscriber has agreed to so reduce its prior subscription.

      


      NOW,
        THEREFORE, in consideration of the mutual promises and the representations
        and
        covenants hereinafter set forth, the parties hereto agree as
        follows:

      


      1.    The
        Subscriber hereby subscribes for the number of Units set forth on the signature
        page hereof, at a price of $9.1696 per Unit.

      


      2.    Except
        as
        specifically provided in this Agreement, the Subscription Agreement is in
        all
        other respects hereby ratified and confirmed without amendment.

      


      3.    Miscellaneous

      


      (a)    This
        Agreement shall not be changed, modified or amended except by a writing signed
        by the parties to be charged, and this Agreement may not be discharged except
        by
        performance in accordance with its terms or by a writing signed by the party
        to
        be charged.

      


      (b)    This
        Agreement shall be binding upon and inure to the benefit of the parties hereto
        and to their respective heirs, legal representatives, successors and assigns.
        This Agreement, together with the Subscription Agreement, sets forth the
        entire
        agreement and understanding between the parties as to the subject matter
        hereof
        and merges and supersedes all prior discussions, agreements and understandings
        of any and every nature among them.

      


      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

      (c)    Notwithstanding
        the place where this Agreement may be executed by any of the parties hereto,
        the
        parties expressly agree that all the terms and provisions hereof shall be
        construed in accordance with and governed by the laws of the State of New
        York
        without regard to principles of conflicts of law. 

      


      (d)    The
        parties agree to execute and deliver all such further documents, agreements
        and
        instruments and take such other and further action as may be necessary or
        appropriate to carry out the purposes and intent of this Agreement.

      


      (e)    This
        Agreement may be executed in two or more counterparts each of which shall
        be
        deemed an original, but all of which shall together constitute one and the
        same
        instrument.

      



      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      


      [Signature
        Page]

       

      
        	
                $_____________________

                Dollars
                  Invested 

              	 	Number
                of Units Purchased ________
	 	 	 
	
              	 	 
	
                Signature

              	 	
                Signature
                  (if purchasing jointly)

              
	 	 	 
	 	 	 
	
                Name
                  Typed or Printed

              	 	
                Name
                  Typed or Printed

              
	 	 	 
	 	 	 
	
                Entity
                  Name

              	 	
                Entity
                  Name

              
	 	 	 
	 	 	 
	
                Address

              	 	
                Address

              
	 	 	 
	 	 	 
	
                City,
                  State and Zip Code

              	 	
                City,
                  State and Zip Code

              
	 	 	 
	 	 	 
	
                Telephone-Business

              	 	
                Telephone--Business

              
	 	 	 
	 	 	 
	
                Telephone-Residence

              	 	
                Telephone--Residence

              
	 	 	 
	 	 	 
	
                Facsimile-Business

              	 	
                Facsimile--Business

              
	 	 	 
	 	 	 
	
                Facsimile-Residence

              	 	
                Facsimile—Residence

              
	 	 	 
	 	 	 
	
                Email
                  Address

              	 	
                Email
                  Address 

              
	 	 	 
	 	 	 
	
                Tax
                  ID # or Social Security # 

              	 	
                Tax
                  ID # or Social Security # 

              
	 	 	 
	 	 	 
	
                Name
                  in which securities should be issued:

              	 


      

       

      Dated:  
        ______________________,
        2005

       

      
        	
                INVESTORS:
                  

              	
                PLEASE
                  CONFIRM THAT THE PREVIOUSLY SUBMITTED REGISTRATION QUESTIONNAIRE
                  IS TRUE,
                  COMPLETE AND CORRECT.
                  Yes_____
                  No_____

              


      

       

      IF
        NOT, PLEASE COMPLETE THE QUESTIONAIRE
        ATTACHED AS EXHIBIT A.


      This
        Amendment to Subscription Agreement is agreed to and accepted by the Company
        as
        of _____________, 2005.  

       

      NETSMART
        TECHNOLOGIES, INC.

       

      By:____________________________________

      Name:

      Title: 

      



      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      


      CERTIFICATE
        OF SIGNATORY

      


      (To
        be
        completed if Securities are

      being
        subscribed for by an entity)

      


      


      I,____________________________,
        am the____________________________ of __________________________________________
        (the “Entity”).

      


      I
        certify
        that I am empowered and duly authorized by the Entity to execute and carry
        out
        the terms of the Amendment to Subscription Agreement and to purchase and
        hold
        the Securities, and certify further that the Amendment to Subscription Agreement
        has been duly and validly executed on behalf of the Entity and constitutes
        a
        legal and binding obligation of the Entity.

      


      IN
        WITNESS WHEREOF, I have set my hand this ______ day of _________________,
        2005.

       

      __________________________________________________

      (Signature)                        

      


      



      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      



      APPENDIX
        A

      


      Netsmart
        Technologies, Inc.

      


      REGISTRATION
        QUESTIONNAIRE 

      FOR

      SELLING
        STOCKHOLDERS

      


      


      Name:
        ________________________________

      (Please
        Print)

      


      


      This
        questionnaire is intended to provide information for a registration statement
        (the “Registration Statement”) to be filed by Netsmart Technologies, Inc. (the
“Company”) covering the resale of the Shares and Warrant Shares acquired by you
        as contemplated by the accompanying Subscription Agreement. Please complete
        (attaching separate sheets if additional space is needed), date and sign
        this
        questionnaire and return it together with your completed subscription agreement.
        

      


      YOU
        MUST
        ANSWER EVERY QUESTION. If a question is inapplicable to you or your answer
        is in
        the negative, please so state by inserting “N/A.” If you are in doubt whether a
        particular question requires an affirmative response from you, please furnish
        full particulars so that those persons responsible for preparing the
        Registration Statement and Prospectus can determine whether any disclosure
        based
        on your answer is required. Information requested in this questionnaire is
        as of
        the date you complete the questionnaire, unless otherwise indicated. Your
        furnishing such information does not necessarily mean that such information
        will
        be disclosed.

      


      DEFINITIONS

      


      Your
        answers to this questionnaire should be made upon the basis of the following
        definitions of terms used in this questionnaire:

      


      The
        term
“beneficial
        owner”
        of a
        security includes any person who, directly or indirectly, through any contract,
        arrangement, understanding, relationship or otherwise has or shares
        (1) voting
        power,
        which
        includes the power to vote, or direct the voting of, such security or
        (2) investment
        power,
        which
        includes the power to dispose or direct the disposition of such security.
        A
        person may be regarded as having voting power of a security which is owned
        (i)
        by his spouse or minor children or by any of his relatives or his spouse’s
        relatives who share the same home with him, (ii) a partnership
        of
        which he is a partner or (iii) a corporation of which he is a substantial
        shareholder. A person is also deemed to be the beneficial owner of shares
        which
        that person has the right to acquire within 60 days, including but not limited
        to any right to acquire through the exercise of an option, through conversion
        of
        a security, pursuant to the power to revoke a trust or pursuant to the automatic
        termination of a trust. 

      


      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      The
        term
“material,”
        when
        used to qualify a requirement for the furnishings of information as to any
        subject, limits the information required to those matters about which the
        average prudent investor should reasonably be informed before buying or selling
        the securities of the Company. If you are in doubt as to the materiality
        of
        certain information, you should relate sufficient facts to enable the Company
        and its advisors to reach a conclusion as to its materiality.

      


      QUESTIONS

      


      QUESTION
        1:

      


      State
        your present position or positions with the Company (if any), including
        membership on any audit, personnel, compensation or similar committee or
        committees; any positions held by you during the previous three years; and
        any
        positions to which you have been elected or appointed but the duties of which
        you have not yet assumed. For each position, list the term or expected term
        of
        office.

      


      ANSWER:

      


      QUESTION
        2:

      


      Other
        than Shares and Warrant Shares that you will acquire in connection with the
        Offering,
        provide
        below information regarding the equity securities of the Company of which
        you
        are the “beneficial owner.”Please
        refer to the definition of “beneficial owner,” above.
        Under
        the column “Nature of Ownership,” please indicate amounts of securities for
        which you have (a) sole voting power, (b) shared voting power, (c) sole
        investment power, or (d) shared investment power. Also, if you hold more
        than 5%
        of the Company’s securities pursuant to a voting trust or similar agreement,
        please separately state the amount of such securities held or to be held
        pursuant to the trust or agreement, the duration of the agreement and the
        names
        and addresses of the voting trustees, outlining briefly their voting rights
        and
        other powers under the trust or agreement. 

      


      ANSWER
        (attach additional pages if necessary):

       

      
        
          	
                  Number
                    of

                	
                  Nature
                    of

                	 
	
                  Shares

                	
                  Ownership

                	
                  Title
                    of Securities

                


        

      


      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      


      QUESTION
        3:

      


      If
        you
        plan to offer your shares of Common Stock through the selling efforts of
        brokers
        or dealers, describe the terms (and attach copies) of any agreement,
        arrangement, or understanding entered into with broker(s) or dealer(s),
        including volume limitations on sales, parties to the agreement and the
        conditions under which the agreement may be terminated. If known, identify
        the
        broker(s) or dealer(s), which will participate in the offering and state
        the
        amount to be offered through each.

      


      ANSWER:

      


      QUESTION
        4:

      


      Describe
        below any information known to you, and if none state “none,” pertaining to
        underwriting compensation and arrangements or any dealings between any
        underwriter or related person, member of the NASD or a person associated
        with a
        member of the NASD, and the Company or any controlling stockholder thereof
        since
        January 1, 2000.

       

      ANSWER:

      


      QUESTION
        5:

      


      State
        below whether you or any of your associates are a member of NASD, a controlling
        shareholder of a member, a person associated or affiliated with a member
        or an
        underwriter or related person with respect to the proposed offering. If you
        responded “yes,” describe such relationship:

      


      ANSWER:

       

      QUESTION
        6:

       

      Are
        you a
        broker-dealer or affiliated with a broker-dealer?

      


      ANSWER:

      


      Yes
        ______ No______

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      


      QUESTION
        7:

      


      If
        you
        are a broker-dealer or are affiliated with a broker-dealer, did you purchase
        the
        securities in the ordinary course of business?

      


      ANSWER:

      


      Yes
        ______ No______

      


      


      QUESTION
        8:

      


      If
        you
        are affiliated with a broker-dealer, did you have any agreements or
        understandings, directly or indirectly, with any person to distribute the
        securities at the time that you purchased the securities?

      


      ANSWER:

      


      Yes
        ______ No______

      


      


      Please
        note that the SEC takes the position that if you are a broker-dealer, you
        are to
        be identified in the Registration Statement as an underwriter. In the “Plan of
        Distribution,” the Registration Statement will provide substantially as
        follows:

      


      “The
        selling stockholders and any broker-dealers, agents or underwriters that
        participate with the selling stockholders in the distribution of the issued
        and
        outstanding shares of common stock or the shares of stock issuable upon exercise
        of warrants may be deemed to be "underwriters" within the meaning of the
        Securities Act, in which event any commissions received by these broker-dealers,
        agents or underwriters and any profits realized by the selling stockholders
        on
        the resales of the securities may be deemed to be underwriting commissions
        or
        discounts under the Securities Act. If the selling stockholders are deemed
        to be
        underwriters, the selling stockholders may be subject to certain statutory
        and
        regulatory liabilities, including liabilities imposed pursuant to Sections
        11,
        12 and 17 of the Securities Act and Rule 10b-5 under the Exchange
        Act.”

      


      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      QUESTION
        9:

       

      Are
        there
        specific individuals who have voting or investment control over the securities?
        If you are an entity, you must answer “yes” to this question and identify such
        individual(s) by name below.

      
 

      ANSWER:

      


      Yes
        ______ No______

      


      If
        you
        answered “yes”, please list the names of such individuals: 

       

      
        
          

        

      

       

      
        
          

        

      

      


      The
        answers to the foregoing questions are true and correct to the best of the
        undersigned’s knowledge, information and belief. The undersigned agrees to
        promptly notify the Company in writing of (a) any transfer by you of your
        Shares
        or Warrants, (b) sales of common stock of the Company (giving the number
        of
        shares sold and the name of the broker-dealer used) and (c) any other changes
        in
        the answers to this questionnaire that should be made as a result of any
        material development occurring subsequent to the date hereof.

      


      Dated:
        ___________, 2005.

      


      


      ____________________________________

      Signature

       

      
        
          
          

        

        
          9