Document:

EXHIBIT 10.02

The CORPORATEplan
for RetirementSM

EXECUTIVE PLAN

Adoption Agreement

IMPORTANT NOTE

This document has not been approved
by the Department of Labor, the Internal Revenue Service or any other
governmental entity. An Employer must determine whether the plan is subject to
the Federal securities laws and the securities laws of the various states. An
Employer may not rely on this document to ensure any particular tax
consequences or to ensure that the Plan is “unfunded and maintained primarily
for the purpose of providing deferred compensation to a select group of
management or highly compensated employees” under the Employee Retirement
Income Security Act with respect to the Employer’s particular situation.
Fidelity Management Trust Company, its affiliates and employees cannot and do
not provide legal or tax advice or opinions in connection with this document.
This document does not constitute legal or tax advice or opinions and is not
intended or written to be used, and it cannot be used by any taxpayer, for the
purposes of avoiding penalties that may be imposed on the taxpayer. This
document must be reviewed by the Employer’s attorney prior to adoption. 

	
 

	
 

	
 

	
Plan Number:
 44230

	
 

	
ECM NQ 2007 AA

	
(07/2007)

	
 

	
10/05/2008

	
 

	
© 2007 Fidelity Management & Research Company

	
 

ADOPTION AGREEMENT

ARTICLE 1

	
 

	
 

	
 

	
 

	
 

	
 

	
1.01

	
PLAN
INFORMATION 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
Name of Plan:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
This is the General
Employment Enterprises, Inc. Executive Retirement Plan (the “Plan”). 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
Plan Status (Check one.):

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(1)

	
Adoption Agreement
effective date: 12/1/2008. 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(2)

	
The Adoption Agreement
 effective date is (Check (A) or check and
 complete (B)):

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(A)

	
 o

	
A new Plan effective date.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(B)

	
þ

	
An amendment and
restatement of the Plan. The original effective date of the Plan was:
1/1/2002.  

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
Name of Administrator, if
 not the Employer:

	
 

	
 

	
 

	
 

	
 

	
_______________________________________________________________________________

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
1.02

	
EMPLOYER

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
Employer Name:      General Employment
 Enterprises, Inc.                    
                    
                    

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
The term “Employer”
 includes the following Related Employer(s)

 (as defined in Section 2.01(a)(25)) participating in the Plan:

	
 

	
 

	
 

	
 

	
 

	
____________________________________________________________________

	
 

	
 

	
 

	
 

	
 

	
____________________________________________________________________

	
 

	
 

	
 

	
Plan Number:
 44230

	
 

	
ECM NQ 2007 AA

	
(07/2007)

	
 

	
10/05/2008

	
 

	
 

	
 

	
 

	
Page 1

	
 

	
 

	
 

	
©
 2007 Fidelity Management & Research Company

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
1.03

	
COVERAGE

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(Check
 (a) and/or (b).)

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
þ

	
The following Employees
 are eligible to participate in the Plan (Check
 (1) or (2)):

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(1)

	
þ

	
Only those Employees
 designated in writing by the Employer, which writing is hereby incorporated
 herein.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(2)

	
 o

	
Only those Employees in
 the eligible class described below:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
________________________________________________________________

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
________________________________________________________________

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
o

	
 The
 following Directors are eligible to participate in the Plan (Check (1) or (2)):

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(1)

	
o

	
Only those Directors
 designated in writing by the Employer, which writing is hereby incorporated
 herein.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(2)

	
 o

	
All Directors, effective
 as of the later of the date in 1.01(b) or the date the Director becomes a
 Director.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(Note: A
 designation in Section 1.03(a)(1) or Section 1.03(b)(1) or a description in
 Section 1.03(a)(2) must include the effective date of such participation.)

	
 

	
 

	
 

	
 

	
 

	
 

	
1.04

	
COMPENSATION

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(If
 Section 1.03(a) is selected, select (a) or (b). If Section 1.03(b) is
 selected, complete (c))

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
For purposes of
 determining all contributions under the Plan:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
o     Compensation
 shall be as defined, with respect to Employees, in the

 _________________________ Plan maintained by the Employer:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(1)

	
o

	
to the extent it is in
 excess of the limit imposed under Code section 401(a)(17).

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(2)

	
o

	
 notwithstanding the limit imposed under
 Code section 401(a)(17).

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
þ Compensation shall be as defined in
 Section 2.01(a)(9) with respect to Employees (Check
 (1), and/or (2) below, if, and as, appropriate):

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(1)

	
þ

	
but excluding the following:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
The value of a qualified
 or a non-qualified stock option granted to an Employee by the Employer to the
 extent such value is includable in the Employee’s taxable income.

	
 

	
 

	
 

	
Plan Number:
 44230

	
 

	
ECM NQ 2007
 AA

	
(07/2007)

	
 

	
10/05/2008

	
 

	
 

	
 

	
 

	
Page 2

	
 

	
 

	
 

	
©
 2007 Fidelity Management & Research Company

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(2)

	
o

	
but excluding bonuses,
 except those bonuses listed in the table in Section
1.05(a)(2).

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
o

	
Compensation shall be as
 defined in Section 2.01(a)(9)(c) with respect to Directors, but excluding the
 following:

	
 

	
 

	
 

	
____________________________________________________________________________

	
 

	
 

	
 

	
 

	
1.05

	
CONTRIBUTIONS
 ON BEHALF OF EMPLOYEES

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
Deferral Contributions (Complete all that apply):

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(1)

	
o

	
Deferral Contributions.
 Subject to any minimum or maximum deferral amount provided below, the
 Employer shall make a Deferral Contribution in accordance with, and subject
 to, Section 4.01 on behalf of each Participant who has an executed salary
 reduction agreement in effect with the Employer for the applicable calendar
 year (or portion of the applicable calendar year).

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Deferral
 Contributions

 Type of Compensation

	
Dollar
 Amount

	
%
 Amount

	
 

	
Min

	
Max

	
Min

	
Max

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(Note: With respect to
each type of Compensation, list the minimum and maximum dollar amounts or percentages
as whole dollar amounts or whole number percentages.) 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(2)

	
o

	
Deferral
 Contributions with respect to Bonus Compensation only. The Employer requires
 Participants to enter into a special salary reduction agreement to make Deferral
 Contributions with respect to one or more Bonuses, subject to minimum and
 maximum deferral limitations, as provided in the table below.

	
 

	
 

	
 

	
Plan Number:
 44230

	
 

	
ECM NQ 2007 AA

	
(07/2007)

	
 

	
10/05/2008

	
 

	
 

	
 

	
 

	
Page 3

	
 

	
 

	
 

	
©
 2007 Fidelity Management & Research Company

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Treated
 As

	
Dollar
 Amount

	
%
 Amount

	
 

	
Deferral
 Contributions

 Type of Bonus

	
Performance

 Based

	
Non-

 Performance

 Based

	
Min

	
Max

	
Min

	
Max

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(Note: With respect to
 each type of Bonus, list the minimum and maximum dollar amounts or
 percentages as whole dollar amounts or whole number percentages. In the event
 a bonus identified as a Performance-based Bonus above does not constitute a
 Performance-based Bonus with respect to any Participant, such Bonus will be
 treated as a Non-Performance-based Bonus with respect to such Participant.)

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
Matching
 Contributions (Choose (1) or (2) below,
 and (3) below, as applicable):

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(1)

	
o

	
The Employer shall make a
 Matching Contribution on behalf of each Employee Participant in an amount
 described below:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(A)

	
o

	
___% of the Employee
 Participant’s Deferral Contributions for the calendar year.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(B)

	
o

	
The amount, if any,
 declared by the Employer in writing, which writing is hereby incorporated
 herein.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(C)

	
o

	

Other:     _______________________________________________________

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(2)

	
o

	
Matching Contribution
 Offset. For each Employee Participant who has made elective contributions (as
 defined in 26 CFR section 1.401(k)-6 (“QP Deferrals”)) of the maximum
 permitted under Code section 402(g), or the maximum permitted under the terms
 of the ___________________________ Plan (the “QP”), to the QP, the Employer shall
 make a Matching Contribution in an amount equal to (A) minus (B) below:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(A)

	
The matching contributions
 (as defined in 26 CFR section 1.401(m)-1(a)(2) (“QP Match”)) that the
 Employee Participant would have received under the QP on the sum of the
 Deferral Contributions and the Participant’s QP Deferrals, determined as
 though—

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
•

	
no limits otherwise
 imposed by the tax law applied to such QP match; and

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
•

	
the Employee Participant’s
 Deferral Contributions had been made to the QP.

	
 

	
 

	
 

	
Plan Number:
 44230

	
 

	
ECM NQ 2007 AA

	
(07/2007)

	
 

	
10/05/2008

	
 

	
 

	
 

	
 

	
Page 4

	
 

	
 

	
 

	
©
 2007 Fidelity Management & Research Company

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(B)

	
The QP Match actually made
 to such Employee Participant under the QP for the applicable calendar year.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Provided, however, that
 the Matching Contributions made on behalf of any Employee Participant
 pursuant to this Section 1.05(b)(2) shall be limited as provided in Section
 4.02 hereof.

	
 

	
 

	
 

	
 

	
 

	
 

	
(3)

	
o

	
Matching Contribution
 Limits (Check the appropriate box (es)):

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(A)

	
o

	
Deferral Contributions in
 excess of ____% of the Employee Participant’s Compensation for the calendar year
 shall not be considered for Matching Contributions.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(B)

	
o

	
Matching Contributions for
 each Employee Participant for each calendar year shall be limited to
 $__________.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
Employer Contributions

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(1)

	
o

	
Fixed Employer
 Contributions. The Employer shall make an Employer Contribution on behalf of
 each Employee Participant in an amount determined as described below:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
__________________________________________________________

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
__________________________________________________________

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(2)

	
þ

	
Discretionary Employer
 Contributions. The Employer may make Employer Contributions to the accounts
 of Employee Participants in any amount (which amount may be zero), as
 determined by the Employer in its sole discretion from time to time in a
 writing, which is hereby incorporated herein.

	
 

	
 

	
 

	
 

	
 

	
1.06

	
CONTRIBUTIONS
ON BEHALF OF DIRECTORS  

	
 

	
 

	
 

	
 

	
(a)

	
o

	
Director Deferral
 Contributions 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
The Employer shall make a
 Deferral Contribution in accordance with, and subject to, Section 4.01 on
 behalf of each Director Participant who has an executed deferral agreement in
 effect with the Employer for the applicable calendar year (or portion of the
 applicable calendar year), which deferral agreement shall be subject to any
 minimum and/or maximum deferral amounts provided in the table below.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Deferral
 Contributions

 Type of Compensation

	
Dollar
 Amount

	
%
 Amount

	
 

	
Min

	
Max

	
Min

	
Max

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Plan Number:
 44230

	
 

	
ECM NQ 2007 AA

	
(07/2007)

	
 

	
10/05/2008

	
 

	
 

	
 

	
 

	
Page 5

	
 

	
 

	
 

	
©
 2007 Fidelity Management & Research Company

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(Note: With respect to
each type of Compensation, list the minimum and maximum dollar amounts or percentages as whole dollar amounts or whole number percentages.) 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
Matching and Employer
 Contributions:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(1)

	
o

	
Matching Contributions.
 The Employer shall make a Matching Contribution on behalf of each Director
 Participant in an amount determined as described below:

	
 

	
 

	
 

	
 

	
 

	
____________________________________________________________

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
____________________________________________________________

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(2)

	
o

	
Fixed Employer Contributions.
 The Employer shall make an Employer Contribution on behalf of each Director
 Participant in an amount determined as described below:

	
 

	
 

	
 

	
 

	
 

	
____________________________________________________________

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
____________________________________________________________

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(3)

	
o

	
Discretionary Employer
 Contributions. The Employer may make Employer Contributions to the accounts
 of Director Participants in any amount (which amount may be zero), as
 determined by the Employer in its sole discretion from time to time, in a
 writing, which is hereby incorporated herein.

	
 

	
 

	
 

	
Plan Number:
 44230

	
 

	
ECM NQ 2007 AA

	
(07/2007)

	
 

	
10/05/2008

	
 

	
 

	
 

	
 

	
Page 6

	
 

	
 

	
 

	
©
 2007 Fidelity Management & Research Company

	
 

	
 

	
 

	
1.07

	
DISTRIBUTIONS
 

	
 

	
 

	
 

	
The form and timing of
 distributions from the Participant’s vested Account shall be made consistent
 with the elections in this Section 1.07.

	
 

	
 

	
 

	
(a) (1) Distribution
 options to be provided to Participants

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(A) Specified

 Date

	
 

	
(B) Specified

 Age

	
 

	
(C) Separation

 From Service

	
 

	
(D) Earlier of

 Separation or

 Age

	
 

	
(E) Earlier of

 Separation or

 Specified Date

	
 

	
(F) Disability

	
(G)
Change
in
Control

	
 

	
(H) Death

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
o Lump
Sum

	
 

	
 o Lump Sum

	
 

	
o Lump
Sum

	
 

	
o Lump
Sum

	
 

	
o Lump
Sum

	
 

	
o Lump
Sum

	
 

	
o Lump
Sum

	
 

	
o Lump
Sum

	
 Deferral

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 Contribution

	
 

	
o
Installments

	
 

	
o
Installments

	
 

	
o
Installments

	
 

	
o
Installments

	
 

	
o
Installments

	
 

	
o
Installments

	
 

	
 

	
o
Installments

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 o Lump Sum

	
 

	
 o Lump Sum

	
 

	
 o Lump Sum

	
 

	
 o Lump Sum

	
 

	
 o Lump Sum

	
 

	
 o Lump Sum

	
 

	
 o Lump Sum

	
 

	
 o Lump Sum

	
 Matching

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 Contributions

	
 

	
o
Installments

	
 

	
o
Installments

	
 

	
o
Installments

	
 

	
o
Installments

	
 

	
o
Installments

	
 

	
o
Installments

	
 

	
 

	
o
Installments

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 þ Lump Sum

	
 

	
 o Lump Sum

	
 

	
 þ Lump Sum

	
 

	
 o Lump Sum

	
 

	
 o Lump Sum

	
 

	
 o Lump Sum

	
 

	
 o Lump Sum

	
 

	
 o Lump Sum

	
 Employer

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 Contributions

	
 

	
þ
Installments

	
 

	
o
Installments

	
 

	
 þ Installments

	
 

	
o
Installments

	
 

	
o
Installments

	
 

	
o
Installments

	
 

	
 

	
o
Installments

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(Note: If the Employer
 elects (F), (G), or (H) above, the Employer must also elect (A), (B), (C),
 (D), or (E) above, and the Participant must also elect (A), (B), (C), (D), or
 (E) above. In the event the Employer elects only a single payment trigger
 and/or payment method above, then such single payment trigger and/or payment
 method shall automatically apply to the Participant. If the employer elects
 to provide for payment upon a specified date or age, and the employer applies
 a vesting schedule to amounts that may be subject to such payment trigger(s),
 the employer must apply a minimum deferral period, the number of years of
 which must be greater than the number of years required for 100% vesting in
 any such amounts. If the employer elects to provide for payment upon
 disability and/or death, and the employer applies a vesting schedule to
 amounts that may be subject to such payment trigger, the employer must also
 elect to apply 100% vesting in any such amounts upon disability and/or
 death.) 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(2)

	
þ

	
A Participant incurs a
 Disability when the Participant (Check at
 least one if Section 1.07(a)(1)(F) or if Section 1.08(e)(3) is elected):

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(A)

	
þ

	
is unable to engage in any
 substantial gainful activity by reason of any medically determinable physical
 or mental impairment that can be expected to result in death or can be
 expected to last for a continuous period of not less than 12 months.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(B)

	
þ

	
is, by reason of any
 medically determinable physical or mental impairment that can be expected to
 result in death or can be expected to last for a continuous period of not
 less than 12 months, receiving income replacement benefits for a period of
 not less than 3 months under an accident and health plan covering employees
 of the Employer.

	
 

	
 

	
 

	
Plan Number: 44230

	
 

	
ECM
 NQ 2007 AA

	
(07/2007)

	
 

	
10/05/2008

	
 

	
 

	
 

	
 

	
Page
 7

	
 

	
 

	
 

	
©
 2007 Fidelity Management & Research Company

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(C)

	
þ

	
is determined to be
 totally disabled by the Social Security Administration or the Railroad
 Retirement Board.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(D)

	
o

	
is determined to be
 disabled pursuant to the following disability insurance program:__________ the
 definition of disability under which complies with the requirements in
 regulations under Code section 409A.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(Note: If more than one
 box above is checked, then the Participant will have a Disability if he
 satisfies at least one of the descriptions corresponding to one of such
 checked boxes.)

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(3)

	
þ

	
Regardless of any payment
 trigger and, as applicable, payment method, to which the Participant would
 otherwise be subject pursuant to (1) above, the first to occur of the
 following Plan-level payment triggers will cause payment to the Participant
 commencing pursuant to Section 1.07(c)(1) below in a lump sum, provided such
 Plan-level payment trigger occurs prior to the payment trigger to which the
 Participant would otherwise be subject.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Payment
 Trigger

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(A)

	
 o

	
Separation from Service
 prior to:

	
 

	
 

	
 

	
 

	
__________________________________

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(B)

	
 o

	
Separation from Service

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(C)

	
þ

	
Death

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(D)

	
þ

	
Change in Control

	
 

	
 

	
 

	
 

	
 

	
(b)

	
Distribution Election
 Change

	
 

	
 

	
 

	
 

	
 

	
A Participant

	
 

	
 

	
 

	
 

	
  (1) o

	
shall

	
 

	
 

	
  (2) þ

	
shall not

	
 

	
 

	
 

	
 

	
be permitted to modify a
 scheduled distribution election in accordance with Section 8.01(b) hereof.

	
 

	
 

	
 

	
Plan Number: 44230

	
 

	
ECM
 NQ 2007 AA

	
(07/2007)

	
 

	
10/05/2008

	
 

	
 

	
 

	
 

	
Page
 8

	
 

	
 

	
 

	
©
 2007 Fidelity Management & Research Company

	
 

	
 

	
 

	
 

	
 

	
(c)

	
Commencement of
 Distributions 

	
 

	
 

	
 

	
 

	
 

	
 

	
(1)

	
Each lump sum distribution
 and the first distribution in a series of installment payments (if
 applicable) shall commence as elected in (A), (B) or (C) below: 

	
 

	
 

	
 

	
(A)
 þ

	
 

	
Monthly on the 1st day of the month which day next follows the applicable triggering event
described in 1.07(a). 

	
 

	
 

	
 

	
(B)
 o

	
 

	
Quarterly on the _____ day of the following months __________, _________, ________, or __________ (list one month in each calendar quarter) which day next follows the applicable triggering event described in 1.07(a).

	
 

	
 

	
 

	
(C)
 o

	
 

	
Annually on the______ day
 of _________ (month) which day next
 follows the applicable triggering event described in 1.07(a).

	
 

	
 

	
 

	
(Note: Notwithstanding the
 above: a six-month delay shall be imposed with respect to certain
 distributions to Specified Employees; a Participant who chooses payment on a
 Specified Date will choose a month, year or quarter (as applicable) only, and
 payment will be made on the applicable date elected in (A), (B) or (C) above
 that falls within such month, year or quarter elected by the Participant.) 

	
 

	
 

	
 

	
 

	
 

	
 

	
(2)

	
The commencement of
 distributions pursuant to the events elected in Section 1.07(a)(1) and
 Section 1.07(a)(3) shall be modified by application of the following:

	
 

	
 

	
 

	
 

	
 

	
(A)
 o

	
 

	
Separation from Service
 Event Delay – Separation from Service will be treated as not having occurred
 for ____ months after the date of such event.

	
 

	
 

	
 

	
 

	
 

	
(B)
 o

	
 

	
Plan Level Delay – all
 distribution events (other than those based on Specified Date or Specified
 Age) will be treated as not having occurred for ____ days (insert number of
 days but not more than 30).

	
 

	
 

	
 

	
 

	
(d)

	
Installment Frequency and
 Duration

	
 

	
 

	
 

	
 

	
 

	
If installments are
 available under the Plan pursuant to Section 1.07(a), a Participant shall be
 permitted to elect that the installments will be paid (Complete 1 and 2 below):

	
 

	
 

	
 

	
 

	
 

	
 

	
(1)

	
at the following
 intervals:

	
 

	
 

	
 

	
 

	
 

	
(A)
 o

	
 

	
Monthly commencing on the
 day elected in Section 1.07(c)(1).

	
 

	
 

	
(B)
 o

	
 

	
Quarterly commencing on
 the day elected in Section1.07(c)(1) (with payments made at three-month
 intervals thereafter).

	
 

	
 

	
(C)
 þ

	
 

	
Annually commencing on the
 day elected in Section 1.07(c)(1).

	
 

	
 

	
 

	
Plan Number: 44230

	
 

	
ECM
 NQ 2007 AA

	
(07/2007)

	
 

	
10/05/2008

	
 

	
 

	
 

	
 

	
Page
 9

	
 

	
 

	
 

	
©
 2007 Fidelity Management & Research Company

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(2)

	
over the following term(s)
 (Complete either (A) or (B)):

	
 

	
 

	
 

	
 

	
 

	
(A)
 þ

	
 

	
Any term of whole years
 between 2 (minimum of 1) and 5 (maximum of 30).

	
 

	
 

	
 

	
 

	
 

	
(B)
 o

	
 

	
Any of the whole year
 terms selected below.

	
 

	
 

	
 

	
 

	
 

	
 

	
o 1

	
o 2

	
o 3

	
o 4

	
o 5

	
o 6

	
 

	
 

	
 

	
 

	
 

	
 

	
o 7

	
o 8

	
o 9

	
o 10

	
o 11

	
o 12

	
 

	
 

	
 

	
 

	
 

	
 

	
o 13

	
o 14

	
o 15

	
o 16

	
o 17

	
o 18

	
 

	
 

	
 

	
 

	
 

	
 

	
o 19

	
o 20

	
o 21

	
o 22

	
o 23

	
o 24

	
 

	
 

	
 

	
 

	
 

	
 

	
o 25

	
o 26

	
o 27

	
o 28

	
o 29

	
o 30

	
 

	
 

	
 

	
(Note: Only elect a term
 of one year if Section 1.07(d)(1)(A) and/or Section 1.07(d)(1)(B) is elected
 above.) 

	
 

	
 

	
 

	
 

	
(e)

	
Conversion to Lump Sum

	
 

	
 

	
 

	
 

	
 

	
 

	
 o

	
Notwithstanding anything
 herein to the contrary, if the Participant’s vested Account at the time such
 Account becomes payable to him hereunder does not exceed $ ____ distribution of the
 Participant’s vested Account shall automatically be made in the form of a
 single lump sum at the time prescribed in Section1.07(c)(1).

	
 

	
 

	
 

	
 

	
 

	
(f)

	
Distribution Rules
 Applicable to Pre-effective Date Accruals

	
 

	
 

	
 

	
 

	
 

	
 

	
 o

	
Benefits accrued under the
 Plan (subject to Code section 409A) prior to the date in Section 1.01(b)(1)
 above are subject to distribution rules not described in Section 1.07(a)
 through (e), and such rules are described in Attachment A Re: PRE EFFECTIVE DATE
 ACCRUAL DISTRIBUTION RULES.

	
 

	
 

	
1.08

	
VESTING
 SCHEDULE

	
 

	
 

	
 

	
 

	
 

	
(a)

	
(1)

	
The Participant’s vested
 percentage in Matching Contributions elected in Section 1.05(b) shall be
 based upon the following schedule and unless Section 1.08(a)(2) is checked
 below will be based on the elapsed time method as described in Section
 7.03(b).

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Years
 of Service

	
 

	
 

	
Vesting %

	
 

	
 

	

	
 

	
 

	

	
 

	
 

	
0

	
 

	
 

	
100

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(2)

	
o   Vesting shall be based on
 the class year method as described in Section 7.03(c).

	
 

	
 

	
 

	
 

	
 

	
(b)

	
(1)

	
The Participant’s vested
 percentage in Employer Contributions elected in Section 1.05(c) shall be
 based upon the following schedule and unless Section 1.08(b)(2) is checked
 below will be based on the elapsed time method as described in Section
 7.03(b).

	
 

	
 

	
 

	
Plan Number: 44230

	
 

	
ECM
 NQ 2007 AA

	
(07/2007)

	
 

	
10/05/2008

	
 

	
 

	
 

	
 

	
Page
 10

	
 

	
 

	
 

	
©
 2007 Fidelity Management & Research Company

	
 

	
 

	
 

	
 

	
Years
 of Service

	
 

	
Vesting%

	

	
 

	

	
0

	
 

	
0

	
1

	
 

	
0

	
2

	
 

	
0

	
3

	
 

	
20

	
4

	
 

	
40

	
5

	
 

	
60

	
6

	
 

	
80

	
7

	
 

	
100

	
 

	
 

	
 

	
 

	
 

	
 

	
(2)

	
o   Vesting shall be based on the class year
 method as described in Section 7.03(c).

	
 

	
 

	
 

	
 

	
 

	
(c)

	
o

	
Years of Service shall
 exclude (Check one.):

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(1)

	
o

	
for new plans, service
 prior to the Effective Date as defined in Section 1.01(b)(2)(A).

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(2)

	
o

	
for existing plans
 converting from another plan document, service prior to the original
 Effective Date as defined in Section 1.01(b)(2)(B).

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(Note: Do not elect to
 apply this Section 1.08(c) if vesting is based only on the class year method.)

	
 

	
 

	
 

	
 

	
 

	
(d)

	
o

	
Notwithstanding anything
 to the contrary herein, a Participant will forfeit his Matching Contributions
 and Employer Contributions (regardless of whether vested) upon the occurrence
 of the following event(s):

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 ________________________________________________________________

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 ________________________________________________________________

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(Note: Contributions with
 respect to Directors, which are 100% vested at all times, are subject to the
 rule in this subsection (d).)

	
 

	
 

	
 

	
 

	
 

	
(e)

	
A Participant will be 100%
 vested in his Matching Contributions and Employer Contributions upon (Check the appropriate box(es)):

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(1)

	
þ

	
Retirement eligibility is
the date the Participant attains age 65 and completes 5 Years of Service, as
defined in Section 7.03(b).  

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(2)

	
þ

	
Death.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(3)

	
þ

	
The date on which the
 Participant becomes disabled, as determined under Section 1.07(a)(2).

	
 

	
 

	
 

	
Plan Number: 44230

	
 

	
ECM
 NQ 2007 AA

	
(07/2007)

	
 

	
10/05/2008

	
 

	
 

	
 

	
 

	
Page
 11

	
 

	
 

	
 

	
©
 2007 Fidelity Management & Research Company

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(Note: Participants will
 automatically vest upon Change in Control if Section 1.07(a)(1)(G) is
 elected.)

	
 

	
 

	
 

	
 

	
 

	
(f)

	
o

	
Years of Service in
 Section 1.08 (a)(1) and Section 1.08 (b)(1) shall include service with the
 following employers:

	
 

	
 

	
1.09

	
INVESTMENT
 DECISIONS

	
 

	
 

	
 

	
 

	
 

	
A Participant’s Account
 shall be treated as invested in the Permissible Investments as directed by the
 Participant unless otherwise provided below:

	
 

	
 

	
 

	
 

	
 

	
 

	
 ____________________________________________________________________

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 ____________________________________________________________________

	
 

	
 

	
 

	
1.10

	
ADDITIONAL
 PROVISIONS

	
 

	
 

	
 

	
 

	
 

	
 

	
The Employer may elect
 Option below and complete the Superseding Provisions Addendum to describe
 overriding provisions that are not otherwise reflected in this Adoption
 Agreement.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
þ

	
The Employer has completed
 the Superseding Provisions Addendum to reflect the provisions of the Plan
 that supersede provisions of this Adoption Agreement and/or the Basic Plan
 Document.

	
 

	
 

	
 

	
Plan Number: 44230

	
 

	
ECM
 NQ 2007 AA

	
(07/2007)

	
 

	
10/05/2008

	
 

	
 

	
 

	
 

	
Page
 12

	
 

	
 

	
 

	
©
 2007 Fidelity Management & Research Company

	
 

EXECUTION PAGE 

(Fidelity’s Copy)

IN WITNESS WHEREOF, the
Employer has caused this Adoption Agreement to be executed this ________day of
_______________, 20_______. 

	
 

	
 

	
 

	
 

	
Employer

	
 

	
 

	
 

	

	
 

	
 

	
By

	
 

	
 

	
 

	

	
 

	
 

	
Title

	
 

	
 

	
 

	

	
 

	
 

	
 

	
Plan Number: 44230
(07/2007)

	
 

	
ECM NQ 2007 AA
10/05/2008

	
 

	
 

	
 

	
 

	
Page 13

	
 

	
 

	
 

	
© 2007 Fidelity Management & Research Company

	
 

EXECUTION PAGE 

(Employer’s Copy)

IN WITNESS WHEREOF, the
Employer has caused this Adoption Agreement to be executed this ________day of
_______________, 20______. 

	
 

	
 

	
 

	
 

	
Employer

	
 

	
 

	
 

	

	
 

	
 

	
 

	
 

	
By

	
 

	
 

	
 

	

	
 

	
 

	
 

	
 

	
Title

	
 

	
 

	
 

	

	
 

	
 

	
 

	
Plan Number: 44230
(07/2007)

	
 

	
ECM NQ 2007 AA
10/05/2008

	
 

	
 

	
 

	
 

	
Page 14

	
 

	
 

	
 

	
© 2007 Fidelity Management & Research Company

	
 

AMENDMENT EXECUTION PAGE 

(Fidelity’s Copy)

	
 

	
 

	
Plan Name:

	
General Employment Enterprises,
 Inc. Executive Retirement Plan (the “Plan”)

	
 

	

	
 

	
 

	
Employer:

	
General Employment
 Enterprises, Inc.

	
 

	

(Note: These execution pages
are to be completed in the event the Employer modifies any prior election(s) or
makes a new election(s) in this Adoption Agreement. Attach the amended page(s)
of the Adoption Agreement to these execution pages.) 

          The
following section(s) of the Plan are hereby amended effective as of the date(s)
set forth below: 

	
 

	
 

	
Section
 Amended

	
Effective
 Date

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

          IN
WITNESS WHEREOF, the Employer has caused this Amendment to be executed on the
date below.

	
 

	
 

	
 

	
 

	
Employer:

	
 

	
 

	
 

	

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	

	
 

	
 

	
 

	
 

	
Title:

	
 

	
 

	
 

	

	
 

	
 

	
 

	
 

	
Date:

	
 

	
 

	
 

	

	
 

	
 

	
 

	
Plan Number: 44230
(07/2007)

	
 

	
ECM NQ 2007 AA
10/05/2008

	
 

	
 

	
 

	
 

	
Page 15

	
 

	
 

	
 

	
© 2007 Fidelity Management & Research Company

	
 

AMENDMENT EXECUTION PAGE 

(Employer’s Copy)

	
 

	
 

	
Plan Name:

	
General Employment
 Enterprises, Inc. Executive Retirement Plan (the “Plan”)

	
 

	

	
 

	
 

	
Employer:

	
General Employment
 Enterprises, Inc. 

	
 

	

(Note: These execution pages
are to be completed in the event the Employer modifies any prior election(s) or
makes a new election(s) in this Adoption Agreement. Attach the amended page(s)
of the Adoption Agreement to these execution pages.) 

	
 

	
 

	
Section
 Amended

	
Effective
 Date

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

          IN
WITNESS WHEREOF, the Employer has caused this Amendment to be executed on the
date below. 

	
 

	
 

	
 

	
 

	
Employer:

	
 

	
 

	
 

	

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	

	
 

	
 

	
 

	
 

	
Title:

	
 

	
 

	
 

	

	
 

	
 

	
 

	
 

	
Date:

	
 

	
 

	
 

	

	
 

	
 

	
 

	
Plan Number: 44230
(07/2007)

	
 

	
ECM NQ 2007 AA
10/05/2008

	
 

	
 

	
 

	
 

	
Page 16

	
 

	
 

	
 

	
© 2007 Fidelity Management & Research Company

	
 

ATTACHMENT A

Re: PRE EFFECTIVE DATE ACCRUAL DISTRIBUTION RULES

	
 

	
 

	
Plan Name:

	
General Employment
 Enterprises, Inc. Executive Retirement Plan (the “Plan”)

	
 

	

	
 

	

	
 

	

	
 

	

	
 

	

	
 

	

	
 

	

	
 

	

	

	
 

	
 

	
 

	
Plan Number: 44230
(07/2007)

	
 

	
ECM NQ 2007 AA
10/05/2008

	
 

	
 

	
 

	
 

	
Page 17

	
 

	
 

	
 

	
© 2007 Fidelity Management & Research Company

	
 

ATTACHMENT B

Re: SUPERSEDING PROVISIONS 
for

	
 

	
 

	
Plan Name:

	
General Employment
 Enterprises, Inc. Executive Retirement Plan (the “Plan”)

	
 

	

	
 

	
 

	
(a)

	
Superseding Provision(s) – The following provisions supersede other provisions
of this Adoption Agreement and/or the Basic Plan Document as described below: 

Notwithstanding anything to the contrary in section 1.08 (b) (1), Years
of Service for vesting purposes shall exclude service in calendar years prior
to the participant’s plan entry date. And notwithstanding the forgoing, Herbert
F. Imhoff, Jr. shall be 100% vested in Employer Contributions at all times.

	
 

	
 

	
 

	
Plan Number: 44230
(07/2007)

	
 

	
ECM NQ 2007 AA
10/05/2008

	
 

	
 

	
 

	
 

	
Page 18

	
 

	
 

	
 

	
© 2007 Fidelity Management & Research CompanyExhibit 10.1 

EXECUTION DRAFT

	
 

	
AGREEMENT AND PLAN OF MERGER

	
 

	
BY AND AMONG

QUALITY SYSTEMS, INC.

	
 

	
NEXTGEN HEALTHCARE INFORMATION SYSTEMS, INC.

	
 

	
RUTH MERGER SUB, INC.

	
 

	
AND

	
 

	
PRACTICE MANAGEMENT PARTNERS, INC.

PERRY SNYDER

	
 

	
AND

DONALD GOOD

	
 

	
October 15, 2008

TABLE OF CONTENTS

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Page

	
 

	
 

	
 

	
 

	
 

	

	
 

	
 

	
 

	
 

	
 

	
 

	
TABLE OF CONTENTS

	
 

	
i

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
AGREEMENT AND PLAN OF
 MERGER

	
 

	
1 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
ARTICLE I THE MERGER

	
 

	
1

	
 

	
 

	
1.1 

	
 

	
The Merger

	
 

	
1 

	
 

	
 

	
1.2

	
 

	
The Closing

	
 

	
1 

	
 

	
 

	
1.3 

	
 

	
Actions at the Closing

	
 

	
1

	
 

	
 

	
1.4

	
 

	
Additional Action

	
 

	
2 

	
 

	
 

	
1.5

	
 

	
Conversion of Shares
 and Options

	
 

	
2

	
 

	
 

	
1.6

	
 

	
Closing Amount
 Adjustments

	
 

	
3 

	
 

	
 

	
1.7

	
 

	
Earnout Payments

	
 

	
6 

	
 

	
 

	
1.8

	
 

	
Dissenting Shares

	
 

	
10

	
 

	
 

	
1.9

	
 

	
Escrow

	
 

	
11 

	
 

	
 

	
1.10

	
 

	
Articles of
 Incorporation and By-laws

	
 

	
13 

	
 

	
 

	
1.11

	
 

	
No Further Rights

	
 

	
13 

	
 

	
 

	
1.12

	
 

	
Stockholder Releases

	
 

	
13 

	
 

	
 

	
1.13

	
 

	
Company Closing
 Expenses

	
 

	
13 

	
 

	
 

	
1.14

	
 

	
Appointment of
 Stockholder Representatives

	
 

	
13

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
ARTICLE II
 REPRESENTATIONS AND WARRANTIES OF THE INDEMNIFYING STOCKHOLDERS

	
 

	
15 

	
 

	
 

	
2.1

	
 

	
Organization, Qualification
 and Corporate Power

	
 

	
15 

	
 

	
 

	
2.2

	
 

	
Capitalization

	
 

	
15 

	
 

	
 

	
2.3

	
 

	
Authorization of
 Transaction

	
 

	
16 

	
 

	
 

	
2.4

	
 

	
Noncontravention

	
 

	
17

	
 

	
 

	
2.5

	
 

	
Subsidiaries

	
 

	
17

	
 

	
 

	
2.6

	
 

	
Financial Statements

	
 

	
17 

	
 

	
 

	
2.7

	
 

	
Absence of Certain
 Changes

	
 

	
17 

	
 

	
 

	
2.8

	
 

	
Undisclosed Liabilities

	
 

	
19 

	
 

	
 

	
2.9

	
 

	
Taxes

	
 

	
19

	
 

	
 

	
2.10

	
 

	
Assets

	
 

	
22 

	
 

	
 

	
2.11

	
 

	
Owned Real Property

	
 

	
22 

	
 

	
 

	
2.12

	
 

	
Real Property Leases

	
 

	
22 

	
 

	
 

	
2.13

	
 

	
Intellectual Property

	
 

	
23

	
 

	
 

	
2.14

	
 

	
Contracts

	
 

	
25 

	
 

	
 

	
2.15

	
 

	
Accounts Receivable

	
 

	
27 

	
 

	
 

	
2.16

	
 

	
Powers of Attorney

	
 

	
27 

	
 

	
 

	
2.17

	
 

	
Insurance

	
 

	
27 

	
 

	
 

	
2.18

	
 

	
Litigation

	
 

	
27 

	
 

	
 

	
2.19

	
 

	
Warranties

	
 

	
27 

	
 

	
 

	
2.20

	
 

	
Employees

	
 

	
28

	
 

i

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
2.21

	
 

	
Employee Benefits

	
 

	
28

	
 

	
 

	
2.22

	
 

	
Environmental Matters

	
 

	
32

	
 

	
 

	
2.23

	
 

	
Legal Compliance 

	
 

	
32

	
 

	
 

	
2.24

	
 

	
Customers and
 Suppliers

	
 

	
33

	
 

	
 

	
2.25

	
 

	
Permits 

	
 

	
33

	
 

	
 

	
2.26

	
 

	
Certain Business
 Relationships With Affiliates 

	
 

	
33

	
 

	
 

	
2.27

	
 

	
Brokers’ Fees

	
 

	
33

	
 

	
 

	
2.28

	
 

	
Books and Records 

	
 

	
34

	
 

	
 

	
2.29

	
 

	
Compliance with
 Healthcare Laws and Regulations 

	
 

	
34

	
 

	
 

	
2.30

	
 

	
Disclosure

	
 

	
35

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
ARTICLE III
 REPRESENTATIONS AND WARRANTIES OF THE PARENT

	
 

	
35

	
 

	
 

	
3.1

	
 

	
Organization and
 Corporate Power 

	
 

	
35

	
 

	
 

	
3.2

	
 

	
Authorization of
 Transaction 

	
 

	
35

	
 

	
 

	
3.3

	
 

	
Noncontravention

	
 

	
36

	
 

	
 

	
3.4

	
 

	
Litigation

	
 

	
36

	
 

	
 

	
3.5

	
 

	
Disclosure

	
 

	
36

	
 

	
 

	
3.6

	
 

	
Valid Issuance of
 Shares 

	
 

	
36

	
 

	
 

	
3.7

	
 

	
SEC Filings

	
 

	
36

	
 

	
 

	
3.8

	
 

	
Material Adverse
 Change 

	
 

	
37

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
ARTICLE IV
 REPRESENTATIONS AND WARRANTIES OF THE PARENT AND MERGER SUB REGARDING MERGER SUB

	
 

	
37

	
 

	
 

	
4.1

	
 

	
Organization and
 Corporate Power

	
 

	
37

	
 

	
 

	
4.2

	
 

	
Authorization of
 Transaction

	
 

	
38

	
 

	
 

	
4.3

	
 

	
Noncontravention

	
 

	
38

	
 

	
 

	
4.4

	
 

	
Litigation

	
 

	
38

	
 

	
 

	
4.5

	
 

	
Disclosure

	
 

	
38

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
ARTICLE V PRE-CLOSING
 AND POST-CLOSING COVENANTS

	
 

	
39

	
 

	
 

	
5.1

	
 

	
Closing Efforts

	
 

	
39

	
 

	
 

	
5.2

	
 

	
Governmental and
 Third-Party Notices and Consents

	
 

	
39

	
 

	
 

	
5.3

	
 

	
Operation of Business

	
 

	
39

	
 

	
 

	
5.4

	
 

	
Access to Information

	
 

	
41

	
 

	
 

	
5.5

	
 

	
Notice of Breaches

	
 

	
41

	
 

	
 

	
5.6

	
 

	
Exclusivity

	
 

	
41

	
 

	
 

	
5.7

	
 

	
Expenses

	
 

	
42

	
 

	
 

	
5.8

	
 

	
Proprietary
 Information

	
 

	
42

	
 

	
 

	
5.9

	
 

	
Stockholder Approval

	
 

	
42

	
 

	
 

	
5.10

	
 

	
Confidentiality

	
 

	
43

	
 

	
 

	
5.11

	
 

	
Employee Benefit Plans

	
 

	
43

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
ARTICLE VI CONDITIONS
 TO CONSUMMATION OF MERGER

	
 

	
45

	
 

	
 

	
6.1

	
 

	
Conditions to
 Obligations of the Parent and Merger Sub

	
 

	
45

	
 

	
 

	
6.2

	
 

	
Conditions to
 Obligations of the Company

	
 

	
46

	
 

ii

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
ARTICLE VII
 INDEMNIFICATION

	
 

	
48

	
 

	
 

	
7.1

	
 

	
Indemnification by the
 Constituents 

	
 

	
48

	
 

	
 

	
7.2

	
 

	
Indemnification by the
 Parent 

	
 

	
49

	
 

	
 

	
7.3

	
 

	
Indemnification Claims
 

	
 

	
50

	
 

	
 

	
7.4

	
 

	
Survival of
 Representations and Warranties 

	
 

	
52

	
 

	
 

	
7.5

	
 

	
Treatment of Indemnity
 Payments 

	
 

	
53

	
 

	
 

	
7.6

	
 

	
Limitations 

	
 

	
53

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
ARTICLE VIII TAX
 MATTERS 

	
 

	
55 

	
 

	
 

	
8.1

	
 

	
Tax Indemnification 

	
 

	
55

	
 

	
 

	
8.2

	
 

	
Preparation and Filing
 of Tax Returns; Payment of Taxes 

	
 

	
55

	
 

	
 

	
8.3

	
 

	
Audits, Assessments,
 Etc. 

	
 

	
56

	
 

	
 

	
8.4

	
 

	
Termination of Tax
 Sharing Agreements 

	
 

	
56

	
 

	
 

	
8.5

	
 

	
Indemnification Claims
 

	
 

	
56

	
 

	
 

	
8.6

	
 

	
Dispute Resolution 

	
 

	
57

	
 

	
 

	
8.7

	
 

	
Limitations 

	
 

	
57

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
ARTICLE IX TERMINATION 

	
 

	
57

	
 

	
 

	
9.1

	
 

	
Termination of
 Agreement 

	
 

	
57

	
 

	
 

	
9.2

	
 

	
Effect of Termination 

	
 

	
58

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
ARTICLE X DEFINITIONS 

	
 

	
58

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
ARTICLE XI
 MISCELLANEOUS 

	
 

	
72

	
 

	
 

	
11.1

	
 

	
Press Releases and
 Announcements 

	
 

	
72

	
 

	
 

	
11.2

	
 

	
No Third Party
 Beneficiaries 

	
 

	
72

	
 

	
 

	
11.3

	
 

	
Entire Agreement 

	
 

	
72

	
 

	
 

	
11.4

	
 

	
Succession and
 Assignment 

	
 

	
72

	
 

	
 

	
11.5

	
 

	
Counterparts and
 Facsimile Signature 

	
 

	
72

	
 

	
 

	
11.6

	
 

	
Headings 

	
 

	
72

	
 

	
 

	
11.7

	
 

	
Notices 

	
 

	
72

	
 

	
 

	
11.8

	
 

	
Governing Law; Consent
 to Jurisdiction and Venue 

	
 

	
73

	
 

	
 

	
11.9

	
 

	
Amendments and Waivers 

	
 

	
74

	
 

	
 

	
11.10

	
 

	
Severability 

	
 

	
74

	
 

	
 

	
11.11

	
 

	
Construction 

	
 

	
74

	
 

	
 

	
11.12

	
 

	
Attorneys’ Fees 

	
 

	
75 

	
 

	
 

	
 

	
 

	
Disclosure Schedule

	
 

	
 

	
 

	
Exhibit A

	
–

	
Stockholder Transmittal
 Letter

	
Exhibit B 

	
–

	
Option Termination
 Agreements

	
Exhibit C

	
–

	
Adjusted Forecast and
 Calculation of Final Revised Cumulative Price

	
Exhibit D

	
–

	
Calculations of
 Assumed Distributions to Constituents

	
Exhibit E

	
–

	
Accounting Policies

	
Exhibit F

	
–

	
Escrow Agreement

	
Exhibit G

	
–

	
Form of Legal Opinion of the Company’s Counsel

	
Exhibit H

	
–

	
Confidential Investor
 Questionnaire

	
Exhibit I 

	
–

	
Executed
 Confidentiality Agreement dated September 3, 2008

iii

	
 

	
 

	
 

	
Exhibit J

	
–

	
Form A of Parent Option Agreement 

	
Exhibit K 

	
–

	
Form B of Parent Option Agreement

	
Exhibit L

	
–

	
Form of Registration Rights Agreement

iv

AGREEMENT
AND PLAN OF MERGER

          This
Agreement and Plan of Merger (this “Agreement”) is entered into as of
October 15, 2008 by and among (i) QUALITY SYSTEMS, INC., a California
corporation (the “Parent”), (ii) NEXTGEN HEALTHCARE INFORMATION SYSTEMS,
INC., a California corporation and a wholly-owned subsidiary of the Parent (“NextGen”)
(iii) RUTH MERGER SUB, INC., a Maryland corporation and a wholly-owned
subsidiary of NextGen (the “Merger Sub”), (iv) PRACTICE MANAGEMENT
PARTNERS, INC., a Maryland corporation (the “Company”), and (v) PERRY
SNYDER and DONALD GOOD (each an “Indemnifying Stockholder” and
collectively, the “Indemnifying Stockholders”).

          This
Agreement contemplates a merger of the Merger Sub with and into the Company. In
such merger, the Constituents will receive cash and shares of Parent’s common
stock in exchange for their capital stock or options to purchase capital stock
of the Company. Unless otherwise defined herein or the context clearly requires
otherwise, capitalized terms used herein shall have the respective meanings set
forth in Article X hereof.

          Now,
therefore, in consideration of the representations, warranties and covenants
herein contained, the Parties agree as follows.

ARTICLE
I 

THE MERGER

          1.1     The
Merger. Upon and subject to the terms and conditions of this Agreement, the
Merger Sub shall merge with and into the Company at the Effective Time. From
and after the Effective Time, the separate corporate existence of the Merger
Sub shall cease and the Company shall continue as the Surviving Corporation.
The Merger shall have the effects set forth in Section 3-114 of the Maryland
General Corporation Law (the “MGCL”).

          1.2     The
Closing. The Closing shall take place at the offices of Whiteford, Taylor
& Preston L.L.P. in Baltimore, Maryland, or at such other place as the
Parties may mutually agree in writing, commencing at 10:00 a.m. local time on
the second Business Day following the date on which the last of the conditions
set forth in Article VI have been satisfied or waived (other than conditions
that may only be satisfied on the Closing date, but subject to satisfaction of
such conditions) or on such other date as the Parent and the Company may
mutually agree in writing (the “Closing Date”). 

          1.3     Actions
at the Closing. 

                    (a)     At
the Closing:

                             (i)      the
Company shall deliver to the Parent the various certificates, instruments and
documents referred to in Section 6.1 of this Agreement;

                             (ii)     the
Parent and/or Merger Sub shall deliver to the Company the various certificates,
instruments and documents referred to in Section 6.2 of this Agreement;

-1-

                            (iii)     the
Surviving Corporation and the Merger Sub shall file with the Maryland State
Department of Assessments and Taxation the Maryland Articles of Merger; and

                            (iv)     the
Parent, the Stockholder Representatives and the Escrow Agent shall execute and
deliver the Escrow Agreement.

                  (b)     Upon
confirmation from the Maryland State Department of Assessments and Taxation
that the Maryland Articles of Merger have been filed and accepted:

                            (i)       each
Company Stockholder, other than holders of Dissenting Shares, shall deliver to
the Parent for cancellation the certificate(s) representing their Company
Shares together with an appropriate letter of transmittal (each, a “Stockholder
Transmittal Letter”) substantially in the form attached hereto as Exhibit
A;

                            (ii)      each
holder of Options shall deliver to the Parent for cancellation the agreements
and/or instruments evidencing his/her Options, together with an acknowledgment
of termination thereof, substantially in the form attached hereto as Exhibit
B (collectively the “Option Termination Agreements”);

                            (iii)     the
Parent shall pay by wire transfer the cash portion of the Closing Amount to
each Constituent into which such Constituent’s Company Shares or Options, as
the case may be, are converted or exchanged pursuant to Section 1.5(a);

                            (iv)     the
Parent shall submit to its transfer agent an order for the issuance of the
Parent Shares portion of the Closing Amount to each Constituent into which such
Constituent’s Company Shares or Options, as the case may be, are converted or
exchanged pursuant to Section 1.5(a);

                            (v)      the
Parent shall deposit the Escrow Amount with the Escrow Agent in accordance with
Section 1.9; and

                            (vi)     the
Parent shall pay in full the Company debt listed in Section 1.3(b)(vi) of the
Disclosure Schedule pursuant to the payoff letters (or other similar
authorizations or demands) from such lenders.

          1.4     Additional
Action. The Surviving Corporation may, at any time after the Effective
Time, take any action, including executing and delivering any document, in the
name and on behalf of the Company or the Merger Sub, in order to consummate the
series of transactions contemplated by this Agreement.

          1.5     Conversion
of Shares and Options. At the Effective Time, by virtue of the Merger and
the Option Termination Agreements without any further action on the part of any
Party or the holder of any of the Company Shares or the holder of any Option:

                    (a)     Each
Company Share (other than Dissenting Shares) and Option shall be converted, in
accordance with the formula set forth in Exhibit C attached hereto, into
the right to receive a portion (which may, in the case of some Options, be
zero) of the Aggregate Transaction Consideration which shall be payable at any
time in which a portion of the Aggregate

-2-

	
 

	
 

	
Transaction
 Consideration is distributed to the Constituents in accordance with the
 provisions of this Agreement or the Escrow Agreement (each a “Payment Date”)
 as follows:

	
 

	
 

	
 

	
                             
 (i)     to each Company Stockholder for each Company
 Share held by him, her or it as of the Effective Time (other than Dissenting
 Shares), an amount of cash or Parent Shares, as the case may be, equal to the
 Final Revised Cumulative Price minus any amounts previously paid to such
 Company Stockholder for such Company Share pursuant to this Section 1.5(a);
 provided, however, that for purposes of this Section 1.5(a)(i), Parent Shares
 shall be valued using the Share Valuation Method; and

	
 

	
 

	
 

	
                              (ii)     to
 each holder of an In-the-Money-Option, for each In-the-Money-Option held by
 such holder, an amount of cash or Parent Shares, as the case may be, equal to
 the product of (a) the Final Revised Cumulative Price, and (b) the number of
 Company Shares issuable upon exercise of the In-the-Money-Option held by such
 holder, minus (y) the aggregate exercise price for such In-the-Money
 Options, minus (z) any amounts previously paid for such
 In-the-Money-Options pursuant to this Section 1.5(a) (ignoring any reductions
 required for tax withholding); provided, however, that for purposes of this
 Section 1.5(a)(ii), Parent Shares shall be valued using the Share Valuation
 Method;

                    (b)     Whenever
cash payments are due by the Parent under this Agreement, Parent shall pay, or
such funds shall be released from the Escrow Account and transferred, by wire
transfer of immediately available funds to the Constituents, the amount
determined in accordance with the preceding provisions of Section 1.5(a).

                    (c)     Each
share of common stock, $0.01 par value per share of the Merger Sub issued and
outstanding immediately prior to the Effective Time shall be converted into and
thereafter evidence one share of common stock, $0.01 par value per share, of
the Surviving Corporation.

                    (d)     No
certificates or scrip representing fractional shares of Parent Shares shall be
issued as part of any amount of the Aggregate Transaction Consideration that a
Constituent has a right to receive. Notwithstanding any other provision of this
Agreement, in the event a Constituent would otherwise have been entitled to
receive a fraction of a share of Parent Shares such fraction shall be rounded
up or down to the nearest whole share.

                    (e)     For
illustrative purposes only, a spreadsheet prepared by Indemnifying Stockholders
showing the calculations for the assumed distributions to each Constituent is
set forth on Exhibit D attached hereto.

          1.6     Closing
Amount Adjustments.

                    (a)     Estimated
Net Debt Adjustment.

                             (i)     The
cash portion of the Closing Amount will be adjusted by the amount, if any, by
which the Net Debt as of the Closing is lesser or greater than One Million
Eight Hundred Thirty-Four Thousand Four Hundred Nineteen Dollars ($1,834,419)
(the “Target Net Debt”).

-3-

                            (ii)    Two
Business Days before the Closing Date, the Stockholder Representatives will
deliver to Parent a certificate setting forth, as of the date thereof, an
estimate of the amount of Cash and Debt expected as of the Closing Date (on a
pro forma basis giving effect to the transactions contemplated by this
Agreement). The amount of Debt will be itemized by creditor, with supporting
detail, and the amount of Cash will specify cash on hand and each cash equivalent,
with supporting detail. If the amount of estimated Net Debt as of the Closing
Date (the “Estimated Net Debt”) is less than the Target Net Debt, the
cash portion of the Closing Amount will be increased by an amount equal to such
shortfall, and if the Estimated Net Debt is greater than the Target Net Debt,
the cash portion of the Closing Amount will be reduced by an amount equal to
such excess (the amount of such increase or decrease shall be referred to as
the “Estimated Net Debt Adjustment”).

                  (b)     Estimated
Working Capital Adjustment

                            (i)     The
cash portion of the Closing Amount will be adjusted by the amount by which
Closing Date Working Capital is greater or less than One Million Three Hundred
Seventy-Five Thousand Four Hundred Fifty-Four ($1,375,454) (the “Target
Working Capital”).

                            (ii)    Two
Business Days before the Closing Date, the Stockholder Representatives will
deliver to Parent a certificate setting forth, as of the date thereof, an
estimate of the Closing Date Working Capital (the “Estimated Working Capital”),
with supporting detail. If the Closing Date Working Capital set forth in such
certificate is greater than the Target Working Capital, the cash portion of the
Closing Amount will be increased by such excess and if the Closing Date Working
Capital set forth in such certificate is less than the Target Working Capital,
the cash portion of the Closing Amount will be decreased by such shortfall (the
amount of such increase or decrease shall be referred to as the “Estimated
Working Capital Adjustment”).

                  (c)     Closing
Amount Adjustment. Within five (5) Business Days after the final
determination of the Final Balance Sheet pursuant to Section 1.6(d) of this
Agreement, the cash portion of the Closing Amount will be adjusted (the amount
of any such adjustment, the “Closing Amount Adjustment”) and the Parent
or the Constituents, as the case may be, will make whatever payments to each
other as are necessary, if any, such that the Closing Amount is what it would
have been had (i) the Estimated Net Debt equaled the Net Debt reflected on such
Final Balance Sheet; and (ii) the Estimated Working Capital equaled the Closing
Date Working Capital reflected on such Final Balance Sheet. Parent will pay any
amount due to the Constituents by wire transfer in immediately available funds
to each of the Constituents in an amount equal to the portion of the Closing
Amount into which his or her Company Shares or Options, as the case may be, are
converted or exchanged pursuant to Section 1.5(a). In the event a Closing
Amount Adjustment is due to the Parent hereunder, the amount shall be disbursed
(i) from the Escrow Amount, (ii) to the extent the Escrow Amount is
insufficient to pay in full such Closing Amount Adjustment, then from any other
amounts of the Aggregate Transaction Consideration payable to the Constituents
hereunder, whether by right of setoff or otherwise, or (iii) if amounts payable
hereunder are not sufficient, upon demand by Parent, from the Indemnifying
Stockholders on a several basis based on their respective Pro Rata Share.

-4-

                  (d)
     Adjustment
Procedures. The adjustments described in Section 1.6(c) will be determined
as follows:

                             (i)     Within
sixty (60) days after the Closing Date, the Parent shall prepare, in accordance
with GAAP, and deliver to the Stockholder Representatives a balance sheet of
the Company as of the Closing Date (the “Final Balance Sheet”). The Parties
acknowledge and agree that for purposes of determining the Closing Amount
Adjustment pursuant to this Section 1.6(d)(i) the Final Balance Sheet shall be
prepared on a basis consistent with and utilizing the same principles,
practices and policies of the Company, as those used in preparing the Most
Recent Balance Sheet, subject to the Accounting Policies. The Parties
acknowledge and agree that the items listed on Section 1.6(d)(i) of the
Disclosure Schedule shall be taken into account in calculating Net Debt and
Closing Date Working Capital for the pre-closing estimates and on the Final
Balance Sheet.

                             (ii)    The
Stockholder Representatives and any professionals chosen by them shall have the
right to review the Surviving Corporation’s books and records relating to, and
the work papers of the Parent and its advisors utilized in, preparing the Final
Balance Sheet. The Final Balance Sheet shall be binding for purposes of the
Closing Amount Adjustment unless the Stockholder Representatives present to the
Parent within 15 Business Days after receipt of the Final Balance Sheet from
the Parent written notice of disagreement specifying in reasonable detail the
nature and extent of the disagreement.

                             (iii)   If
the Stockholder Representatives deliver a timely notice of disagreement, the
Parent and the Stockholder Representatives shall attempt in good faith during
the thirty (30) days immediately following the Parent’s receipt of timely
notice of disagreement to resolve any disagreement with respect to the Final
Balance Sheet. If, at the conclusion of such 30-day period, the Parent and the
Stockholder Representatives have not resolved their disagreements regarding the
Final Balance Sheet, the Parent and the Stockholder Representatives shall refer
the items of disagreement for final determination to the Philadelphia office of
a regional accounting firm which is mutually acceptable to the Parent and the
Stockholder Representatives (the “Accountants”). However, if the Parent
and Stockholder Representatives are unable to agree on such a firm which is
willing to so serve, the Parent shall deliver to the Stockholder
Representatives a list of two independent regional accounting firms that are
not auditors, tax advisors or other consultants to the Parent, the Company or
the Stockholder Representatives, and the Stockholder Representatives shall
select one of such two firms to be the Accountants within five (5) Business
Days. The parties will be reasonably available for such firm, and shall
instruct such firm to render a final determination within the 20 days
immediately following the referral to the Accountants. The Final Balance Sheet
shall be deemed to be conclusive and binding on the Parent and the Constituents
upon (A) the failure of the Stockholder Representatives to deliver to the
Parent a notice of disagreement within 15 Business Days of their receipt of the
Final Balance Sheet prepared by the Parent, (B) resolution of any disagreement
by mutual agreement of the Parent and the Stockholder Representatives after a
timely notice of disagreement has been delivered to the Parent, or (C)
notification by the Accountants of their final determination of the items of
disagreement submitted to them.

                  (e)      The
fees and disbursements of the Accountants under Section 1.6(d) shall be borne
exclusively by the Constituents unless the adjustments to the Final Balance
Sheet

-5-

resulting from the
Stockholder Representatives’ notice of disagreement caused an increase in the
Closing Amount Adjustment in favor of the Constituents in excess of one hundred
thousand dollars ($100,000), in which case such fees and disbursements shall be
borne exclusively by the Parent. In the event the Constituents are obligated to
pay the fees and disbursements of the Accountants hereunder, such amounts shall
be disbursed (i) from the Escrow Amount, (ii) to the extent the Escrow Amount
is insufficient to pay in full such fees and disbursements, then from any other
amounts of the Aggregate Transaction Consideration payable to the Constituents
hereunder, whether by right of setoff or otherwise, or (iii) if amounts payable
hereunder are not sufficient, upon demand by Parent, from the Indemnifying
Stockholders.

          1.7     Earnout
Payments.

                    (a)     The
Constituents shall be eligible to receive earnout consideration up to a maximum
of three million dollars ($3,000,000) for all such earnout payments, based on
the performance of the Surviving Corporation following the Closing as set forth
in this Section 1.7.

                             (i)     For
the period beginning immediately after the Closing and ending on the first
anniversary of the Closing (the “First Earnout Period”), the
Constituents shall receive $3 for every $1 of Post-Closing Net Income in excess
of one hundred ten percent (110%) of the Adjusted Forecast for such First
Earnout Period (the “First Earnout Period Payment”).

                             (ii)    For
the period beginning on the day after the first anniversary of the Closing and ending on
the second anniversary of the Closing (the “Second Earnout Period”), the
Constituents shall receive $3 for every $1 of Post-Closing Net Income in excess
of one hundred ten percent (110%) of the Adjusted Forecast for such Second
Earnout Period until the Post-Closing Net Income results in an aggregate of
$1.5 million of earnout consideration being earned during the Second Earnout
Period (such amount of Post-Closing Net Income, the “Second Earnout
Threshold”), at which point the amount earned thereafter shall change to
$1.50 for every $1 of Post-Closing Net Income in excess of the Second Earnout
Threshold for such Second Earnout Period (collectively, the “Second Earnout
Period Payment”).

                    (b)     Earnout
amounts shall be calculated promtly after the preparation of the Parent’s
financial statements following the accounting period in which the end of such
earnout period occurs. The First Earnout Period Payment, if any, shall be
deposited with Escrow Agent and made part of the Escrow Amount. The calculation
of the amount earned in the First Earnout Period Payment or Second Earnout
Period Payment, as the case may be, may be referred to as the “Earnout
Payment” for such period. Such Earnout Payments shall be delivered to the
Escrow Agent or paid to the Constituents in accordance with Section 1.5(a), as
the case may be, within the later of (i) ninety (90) days after the Parent’s
delivery to the Stockholder Representatives of the applicable Earnout
Certificate, or (ii) if disputed pursuant to Section 1.7(f) below, ten (10)
Business Days after final determination of the applicable Earnout Payment
pursuant to the provisions of Section 1.7(f).

                    (c)     [intentionally
omitted]

                    (d)     In
no case shall the aggregate amounts paid pursuant to this Section 1.7 exceed
$3 million.

-6-

                  (e)     As
soon as reasonably practicable following Parent’s determination of the Earnout
Payment for each of the First Earnout Period and Second Earnout Period (but in
no event prior to the date the Parent’s financial statements for the periods to
which such Earnout Payments relate have been publicly disclosed by Parent),
Parent will deliver to the Stockholder Representatives (i) a statement that
includes each element of the calculation of the Earnout Payment; and (ii) a
certificate of the Parent’s Chief Financial Officer certifying on behalf of the
Parent that the calculation of the Earnout Payment was made in accordance with
the terms of this Section 1.7 (such statement and certificate being referred to
as the “Earnout Certificate”). The Stockholder Representatives and their
professional advisors will be given reasonable access to only those books and
records of the Surviving Corporation that are necessary to confirm the
calculation of the Earnout Payment. All information obtained by the Stockholder
Representatives shall be deemed to be confidential information of the Parent
subject to the restrictions of the Confidentiality Agreement attached hereto as
Exhibit I.

                  (f)     Dispute
Resolution.

                           (i)     The
amount of the Earnout Payment for each of the First Earnout Period and Second
Earnout Period set forth in the Earnout Certificate shall be binding on the
Constituents unless the Stockholder Representatives present to the Parent
within sixty (60) days after receipt of the Earnout Certificate written notice
of disagreement specifying in reasonable detail the nature and extent of the
disagreement. The Parent and the Stockholder Representatives shall attempt in
good faith during the thirty (30) days immediately following the Parent’s
receipt of the Stockholder Representatives’ timely notice of disagreement to
resolve any disagreement with respect to such Earnout Payment.

                           (ii)    If,
at the end of the 30-day period referenced in Section 1.7(f)(i) above, Parent
and the Stockholder Representatives have not resolved all disagreements with
respect to whether the calculation of the Earnout Payment is in accordance with
the terms of Section 1.7 of this Agreement, Parent and the Stockholder
Representatives will refer the items of disagreement to the Accountants
(selected in accordance with Section 1.6(d)(iii)) for non-binding mediation.
The parties will be reasonably available and work diligently to facilitate the
mediation of all disputes between the parties within the 30-day period
immediately following the referral to the Accountants. The Accountants, Parent
and the Stockholder Representatives will enter into such engagement letters as
required by the Accountants to perform under this Section 1.7(f)(ii). The fees
and disbursements of the Accountants under this Section 1.7(f)(ii) will be
deducted from the Earnout Payments (and borne by the Stockholder Representatives
if there are no Earnout Payments), unless it is determined that (A) the Earnout
Certificate understated the applicable Earnout Payment for the period in
question by $100,000 or more or (B) Parent acted in bad faith with respect to
such understatement, in either which case such fees and disbursements will be
borne exclusively by Parent.

                           (iii)   If,
at the end of the second 30-day period referenced in subsection (ii) above, Parent
and the Stockholder Representatives have not resolved all disagreements
submitted to the Accountants for mediation with respect to whether the
calculation of the Earnout Payment is in accordance with the terms of Section
1.7 of this Agreement, any such remaining disagreement, regardless of the legal
theory upon which it is based, will be settled by final, binding arbitration
pursuant to the Federal Arbitration Act, 9

-7-

U.S.C.
§ 1 et seq., in accordance with the applicable rules
of the American Arbitration Association (“AAA”) in effect at such time,
which will be the sole and exclusive procedures for any such disagreement. The
arbitration will be heard before a sole neutral arbitrator mutually agreed upon
by Parent and the Stockholder Representatives. If Parent and the Stockholder
Representatives cannot agree upon such an arbitrator within ten (10) Business
Days after the date referenced in the first sentence of this subsection (iii),
AAA will appoint an arbitrator with expertise in the general industry of the
business engaged in by the Surviving Corporation. All arbitration proceedings
will take place in Philadelphia, Pennsylvania. If the arbitrator finds in favor
of the Constituents, the arbitrator will have no authority to award amounts to
the Constituents in excess of the amounts the Constituents would have been
entitled to receive for any Earnout Payment in the absence of the actions taken
by Parent and determined by the arbitrator to be in violation of Section 1.7.
Without limiting the generality of the foregoing, the arbitrator will have no
authority to award any special, punitive, exemplary, consequential, incidental
or indirect losses or damages. Judgment upon any award granted in a proceeding
brought pursuant to this subsection (iii) may be entered in any court of
competent jurisdiction. Should it become necessary to resort or respond to
court proceedings to enforce a Party’s compliance with this Section
1.7(f)(iii), such proceedings will be brought only in the federal or state
courts located in Philadelphia, Pennsylvania, which will have exclusive jurisdiction
to resolve any disputes with respect to this Section 1.7(f)(iii), with each
Party irrevocably consenting to the jurisdiction thereof.

                  (g)     Conduct
of Business.

                           (i)     The
Constituents understand, acknowledge and agree (as evidenced by, in the case of
the Company Stockholders, the adoption of this Agreement and the approval of
the Merger by such Company Stockholders and, in the case of the holders of
Options, the execution and delivery of the Option Termination Agreements by
such holders of Options) that, except as specifically restricted by subsections
(ii), (iii), (iv) and (v) of this Section 1.7(g), the Parent is entitled to
manage and operate the Surviving Corporation and its businesses in its sole and
absolute discretion.

                           (ii)    Unless
otherwise agreed to in writing by each of Parent and the Stockholder Representatives
in its and their sole discretion, to the extent Parent or an Affiliate of
Parent, except through the Surviving Corporation, during the Earnout Periods in
the states of Virginia, Maryland, Delaware and the District of Columbia (the “Target
Region”): (A) conducts outsourced billing and collections services
business, then any increase in net income of the Parent or an Affiliate of
Parent attributable to new business generated in the Target Region shall be
credited to the Surviving Corporation for purposes of Section 1.7(a) hereof; or
(B) acquires or combines with any Acquired Person that conducts outsourced billing
and collections services business, then any increase in net income of the
Acquired Person attributable to new business generated in the Target Region
after the closing of such acquisition or combination over the net income of the
Acquired Person in the Target Region prior to such closing shall be credited to
the Surviving Corporation for purposes of Section 1.7(a) hereof. To the extent
that Parent or an Affiliate of Parent requires the Surviving Corporation to
manage or operate (A) a business or (B) another Affiliate that operates outside
of the Target Region, any increase in net income of the Parent or such
Affiliate of Parent attributable to such managed or operated business or other
Affiliate shall be credited to the Surviving Corporation for purposes of
Section 1.7(a) hereof.

-8-

Net income generated from
business in the Target Region or from the acquisition or combination with any
Acquired Person shall be determined in accordance with the principles outlined
in this Agreement, where applicable.

                           (iii)    Notwithstanding
any other provision herein, (A) without the Surviving Corporation’s prior written
consent, Parent will not and will not permit an Acquired Person or any other of
Parent’s Affiliates (other than the Surviving Corporation) to solicit any
active customers, or identified prospects, of the Surviving Corporation for the
provision of services that fall within the scope of the definition of
“Business,” and (B) without Parent’s prior written consent, Surviving Corporation
will not and will not permit its employees, agents or representatives to
solicit any active customers, or identified prospects, of Parent or Parent’s
Affiliates (other than the Surviving Corporation) for the provision of
services. An “identified prospect” of the Surviving Corporation or of Parent is
a potential customer of the Company (pre-Closing) or Surviving Corporation
(post-Closing), on the one hand, or Parent or Parent’s Affiliates (other than
the Surviving Corporation), on the other hand, to which such party has made a
written proposal or solicitation and had face to face contact, in each case
within the immediately preceding 120 days from the time in question and (X) as
to the Surviving Corporation, has been disclosed by the Company in Section 1.7(g)(iii)(X)
of the Disclosure Schedule and, (Y) as to Parent or Parent’s Affiliates (other
than the Surviving Corporation), has been disclosed by Parent in Section
1.7(g)(iii)(Y) of the Disclosure Schedule, each of which respective schedules
shall be updated by the Surviving Corporation and Parent on a calendar quarter
basis until the end of the Second Earnout Period and delivered to the other
party (Surviving Corporation or Parent, respectively) in writing within ten
(10) business days of the end of each calendar quarter. An “active customer” is
a customer to which the Company (pre-Closing) or Surviving Corporation
(post-Closing), on the one hand, or Parent or Parent’s Affiliates (other than
the Surviving Corporation), on the other hand, has actually provided services
within the immediately preceding six (6) months from the time in question.

                           (iv)    The
Parties acknowledge and agree that, unless otherwise agreed to in writing by
each of Parent and the Stockholder Representatives, in its and their sole
discretion, during the Earnout Periods, Parent will not cause to be operated
through the Surviving Corporation any business other than the Business and such
other activities, if any, conducted by the Surviving Corporation as of the Closing
Date.

                           (v)     Parent
will maintain or cause to be maintained separate or otherwise identifiable (e.g., in the case of a shared general
ledger) books and records for the Surviving Corporation at all times during the
Earnout Periods in a manner reasonably necessary for the financial statements
of the Surviving Corporation to be prepared in accordance with GAAP (and in a
manner consistent with the Accounting Policies).

                  (h)    Acceleration
of Earnout Payments. Upon the occurrence of an Acceleration Event at any
time prior to the end of the Second Earnout Period, then, notwithstanding
anything to the contrary in this Agreement, automatically and without any
further action on the part of Parent, Stockholders Representatives, or any
Company Stockholder, the maximum aggregate $3 million amount of Earnout
Payments, less any Earnout Payments already paid, will immediately become due
and payable to the Constituents. For purposes of illustration only, if an
Acceleration Event occurs in the First Earnout Period, then the $3 million

-9-

maximum
earnout amount, less any amounts already paid in the First Earnout Period will
be accelerated and payable by the Parent to the Constituents. Parent will give
Stockholder Representatives written notice of the occurrence (i) of an
Acceleration Event within 48 hours of the occurrence of such Acceleration Event
and (ii) of the execution of a definitive agreement for a transaction described
in the definition of Acceleration Event within 48 hours of the execution of
such definitive agreement. Such accelerated Earnout Payments shall be paid to
the Constituents within fifteen (15) days after the Acceleration Event, and as
contemplated under Section 1.5.

                    (i)     Loss
of Right to Earnout. Notwithstanding anything to the contrary in this
Agreement or the subsequently referenced employment agreements, the First
Earnout Period Payment and Second Earnout Period Payment otherwise payable to
each Constituents that is also a party to an employment agreement pursuant to
Article VI hereof shall be permanently forfeited, and the total amount of such
earnouts permanently reduced, as follows:

                             (i)     In
the event any Constituent that is a party to an employment agreement pursuant to Article VI hereof shall
be terminated for cause or resign without good reason (as such terms are
defined in the respective employment agreement to which such Constituent is a
party) prior to or on the last day of the First Earnout Period, the entire
First Earnout Period Payment that would otherwise be payable to such
Constituent shall be permanently forfeited in full and the total First Earnout
Period Payment payable to all Constituents shall be reduced by such amount.

                             (ii)    In
the event any Constituent that is a party to an employment agreement pursuant to Article VI hereof shall
be terminated for cause or resign without good reason (as such terms are
defined in the respective employment agreement to which such Constituent is a
party) prior to or on the last day of the Second Earnout Period, the entire
Second Earnout Period Payment that would otherwise be payable to such
Constituent shall be permanently forfeited in full and the total Second Earnout
Period Payment payable to all Constituents shall be reduced by such amount.

          1.8     Dissenting
Shares.

                    (a)     Dissenting
Shares shall not be converted into or represent the right to receive any
portion of the Aggregate Transaction Consideration unless such Company
Stockholder shall have forfeited his, her or its right to appraisal under the
MGCL or properly withdrawn his, her or its demand for appraisal. Until such
time, any portion of the Aggregate Transaction Consideration that would have
otherwise been payable to such Company Stockholder shall be held in a separate
bank account maintained by the Parent (the “Dissenting Share Consideration”).
If such Company Stockholder has so forfeited or withdrawn his, her or its right
to appraisal of Dissenting Shares, then, (i) as of the occurrence of such
event, such holder’s Dissenting Shares shall cease to be Dissenting Shares and
shall be converted into and represent the right to receive the Aggregate
Transaction Consideration payable in respect of such Company Shares pursuant to
Section 1.5, and (ii) promptly following the occurrence of such event, the
Parent or the Surviving Corporation shall deliver to such Company Stockholder,
a payment representing the Closing Amount to which such holder is entitled
pursuant to

-10-

Section 1.5. Unless
otherwise paid to a dissenting Company Stockholder as set forth herein, the
Dissenting Share Consideration shall remain the property of the Parent.

                    (b)     The
Company shall give the Parent (i) prompt notice, but in no event later than two
(2) days, of any written demands for appraisal of any Company Shares,
withdrawals of such demands, and any other instruments that relate to such
demands received by the Company and (ii) the opportunity to direct all
negotiations and proceedings with respect to demands for appraisal under the
MGCL. The Company shall not, except with the prior written consent of the
Parent, make any payment with respect to any demands for appraisal of Company
Shares or offer to settle or settle any such demands.

                    (c)     In
the event the Parent becomes obligated to make any payment with respect to any
demands for appraisal of Company Shares, such payment shall be satisfied first
by payment of the Dissenting Share Consideration to the dissenting Company
Stockholders. For amounts payable to such Dissenting Company Stockholders in
excess of the Dissenting Share Consideration, the Parent shall seek such
payment (i) from any amounts of the Aggregate Transaction Consideration payable
to the Constituents hereunder (including, but not limited to, the Escrow
Amount), whether by right of setoff or otherwise, or (ii) if amounts payable
hereunder are not sufficient, upon demand by the Parent, from the Indemnifying
Stockholders.

          1.9     Escrow.

                    (a)     Escrow
Amount to Secure Obligations. On the Closing Date, the Parent or the Merger
Sub shall deposit with the Escrow Agent the Escrow Amount. The Escrow Amount
shall represent a source of funds to secure the Constituents’ and the
Indemnifying Stockholders’ obligations hereunder to the extent the Escrow
Amount has not been reduced by operation of Section 1.6, Section 1.8, this
Section 1.9 and Articles VII and VIII hereof or in accordance with the Escrow
Agreement. The Escrow Amount shall be held by the Escrow Agent under the Escrow
Agreement pursuant to the terms thereof. Subject to the release provisions of
this Section 1.9, the Escrow Amount shall be held as a trust fund and shall not
be subject to any lien, attachment trustee process or any other judicial
process of any creditor of any party, and shall be held and disbursed solely
for the purposes and in accordance with the terms of the Escrow Agreement.

                    (b)     Release
of Escrow Amount to Constituents.

                               (i)     $1,500,000,
or such lesser balance of the Escrow Amount as may then exist, shall be
released to the Constituents upon the Company or Surviving Corporation
obtaining all of the consents, releases and waivers set forth in Section
1.9(b)(i) of the Disclosure Schedule.

                               (ii)    Within
thirty (30) days after each AR Measuring Date, a portion of the Escrow Amount
shall be released in accordance with the following formula:

	
 

	
 

	
 

	
X = (A / B) * Y 

	
 

	
 

	
 

	
Where:

-11-

	
 

	
 

	
X =   

	
the amount of the
 Escrow Amount to be released.

	
 

	
 

	
A =   

	
the Closing Accounts
 Receivable collected during the period beginning on the first day after the
 previous AR Measuring Date and ending on the AR Measuring Date (or, with
 respect to the first AR Measuring Date, the period beginning on the first day
 after the Closing Date and ending on the first AR Measuring Date).

	
 

	
 

	
B =   

	
the total Closing
 Accounts Receivable.

	
 

	
 

	
Y =   

	
the lesser of
 $1,500,000 or the Escrow Amount then remaining in the Escrow Account.

                          “AR
Measuring Date” means the last Business Day of each calendar month after
the Closing.

                  (c)     A
portion of the Escrow Amount may be released to the Parent in accordance with
Section 1.9(c) of the Disclosure Schedule.

                  (d)     In
accordance with the terms of the Registration Rights Agreement, a portion of
the Escrow Amount equal to the amount of any fees, costs or expenses to Parent
or its Affiliates in connection with Parent’s performance under the
Registration Rights Agreement shall be released to Parent if and when such
fees, costs or expenses are incurred.

                  (e)     The
remaining balance of the Escrow Amount will be released to the Constituents
promptly after January 1, 2011 and after any remaining releases of the Escrow
Amount that may be due to the Parent are calculated pursuant to Section 1.9(c),
1.9(d), Article VII and Article VIII.

                  (f)     Any
amounts released from the Escrow Account shall be paid to the Constituents in
accordance with Section 1.5.

                  (g)     The
adoption of this Agreement and the approval of the Merger by the Company
Stockholders shall constitute approval of the Escrow Agreement and of all of
the arrangements relating thereto, including the placement of the Escrow Amount
in escrow and the appointment of the Stockholder Representatives to act on
behalf of the Constituents.

                  (h)     Whenever
any portion of the Escrow Amount is to be released to one or more Constituents,
the Stockholder Representatives shall provide to Parent, certified in writing
by each of the Stockholder Representatives (“Payment Information Certificate”),
a schedule specifying the name, address and taxpayer identification number for
each such Constituent and the exact amount and type of Escrow Amount to be
disbursed to each such Constituent (“Payment Information”). The
preparation of the Payment Information Certificate and the accuracy of the Payment
Information set forth thereon shall be the sole and exclusive responsibility of
the Stockholder Representatives; provided, however, that Parent
shall have the right to review and approve such Payment Information Certificate
and Payment Information, which approval shall not be unreasonably withheld or
delayed.

-12-

          1.10  
Articles of Incorporation and By-laws.

                    (a)    The
Articles of Incorporation of the Surviving
Corporation immediately following the Effective Time shall be the same
as the Articles of Incorporation of the Company immediately prior to the Effective Time.

                    (b)    The
By-laws of the Surviving Corporation
immediately following the Effective
Time shall be the same as the By-laws of the Company immediately prior to the Effective Time.

          1.11    No Further
Rights. From and after the Effective Time, no Company Shares shall be
deemed to be outstanding, and holders of certificates formerly representing
Company Shares shall cease to have any
rights with respect thereto except as provided herein or by law.

          1.12    Stockholder Releases.

                     (a)       Except
as set forth in Section 1.12 of the
Disclosure Schedule, effective as of
the Closing, each Indemnifying Stockholder agrees not to sue and fully releases
and discharges the Company, the
Surviving Corporation, the Parent and their respective stockholders, directors, officers, assigns and successors, past
and present (collectively, “Releasees”), with respect to and from any and all claims, issuances
of the Company’s stock, notes or other securities,
any demands, rights, liens, contracts, covenants, proceedings, causes of
action, obligations, debts, and
losses of whatever kind or nature in law, equity or otherwise, whether now known or unknown, and whether or not concealed
or hidden, all of which each Indemnifying
Stockholder now owns or holds or has at any time owned or held against
Releasees connected with or relating
to any matter occurring on or prior to the Closing Date. Nothing in this
Section 1.12 will be deemed to constitute a release by any Indemnifying
Stockholder of any right of such Indemnifying
Stockholder under this Agreement or any right to receive compensation or benefits under employee benefit
plans attributable to the periods prior to the Closing Date.

                     
(b)        It is the intention of each Indemnifying
Stockholder that such release be effective
as a bar to each and every claim, demand and cause of action hereinabove
specified.

          1.13    Company Closing Expenses. At the
Closing, subject to Section 5.7, Parent
shall cause the payment of the
Company Closing Expenses directly to those Persons designated in writing on Section 1.13 of the Disclosure Schedule
as being entitled thereto. As soon as reasonably
practicable prior to the Closing, the Stockholder Representatives shall
designate in writing the amounts payable to such Persons as Company
Closing Expenses. The Company and the
Stockholder Representatives hereby represent and warrant that there will be no
other Company Closing Expenses.

          1.14
    Appointment
of Stockholder Representatives.

                     (a)    Upon
the approval of the Merger by the Company
Stockholders in accordance with the
MGCL, the Company Stockholders will irrevocably make, constitute and appoint up to two representatives to act as the
Company Stockholders’ representatives and agents for all purposes under this Agreement (collectively, the “Stockholder
Representatives”). In

-13-

addition,
prior to the Effective Time, the Company shall obtain an Option Termination Agreement from each holder of an Option which
shall designate and appoint the duly elected Stockholder Representatives (or their successors) as each such holder’s
duly appointed Stockholder
Representative for all purposes under this Agreement. Upon election of the Stockholder Representatives and upon receipt of the
Option Termination Agreement, the Stockholder
Representatives will be authorized to execute on behalf of each Constituent any
and all documents and agreements referred to herein upon the Closing.

                   (b)    Should
either Stockholder Representative or both Stockholder Representatives resign or
be unable to serve, the Constituents having received a majority of the Aggregate Transaction Consideration distributed as
of the latest Payment Date shall appoint a single substitute agent to take on the responsibilities of such
Stockholder Representative or Stockholder Representatives, whose appointment
shall be effective on the date of the prior Stockholders Representative’s resignation or incapacity.

                   (c)    By
way of illustration only, and without
limitation, the Stockholder Representatives
shall have the authority to (i) execute on behalf of each Constituent, as fully
as if the Constituents were acting on their own behalf, any and all documents
and agreements referred to herein,
including executing this Agreement and the Escrow Agreement as the
Constituents’ representative, (ii)
give and receive notice or instructions permitted or required under this
Agreement or the Escrow Agreement, (iii) authorize the release of the amounts
held in the Escrow Fund to pay any
Claimed Amount, Closing Amount Adjustment or any other amounts payable out of the Escrow Fund in accordance with
this Agreement or (iv) to undertake any actions with respect to the resolution of a Dispute or any disagreement
with respect to the amount of any
Earnout Payment, including partaking in any dispute resolution process.

                   (d)    Any
notice, direction or communication received by
Parent, Merger Sub or the Surviving
Corporation from the Stockholder Representatives, or delivered to the Stockholder Representatives by Parent, Merger Sub
or the Surviving Corporation, shall be binding
upon the Constituents, and each of them. The Stockholder Representatives shall
act in all matters on behalf of the
Constituents and Parent and Merger Sub and, after the Effective Time, the Surviving Corporation shall be entitled
to rely on the actions of the Stockholder Representatives hereunder acting in concert or alone as the actions of
the Constituents. Any single
Stockholder Representative shall have the authority to bind the Stockholder Representatives as a group and the Parent and its
Affiliates shall be entitled to rely on any and all documents signed by
any one or more Stockholder Representatives. Parent, Merger Sub and the Surviving Corporation may deliver notices and
communications to the Constituents hereunder through the Stockholder
Representatives at the address set forth in this Agreement for notices, and
such delivery shall be deemed to have been made to any or all of the
Constituents. None of Parent, Merger Sub nor the Surviving Company shall
pay any costs or expenses incurred by the Stockholder
Representatives in carrying out their obligations hereunder. Each of Parent,
Merger Sub and the Surviving Corporation consents to the appointment of the
Stockholder Representatives to act as described hereunder.

-14-

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF

THE INDEMNIFYING STOCKHOLDERS

          Each
of the Indemnifying Stockholders, severally, represents and warrants to the
Parent that, except as set forth in the Disclosure Schedule, the statements
contained in this Article II are true and correct as of the date of this
Agreement and will be true and correct as of the Closing, except to the
extent such representations and warranties are specifically made as of a
particular date (in which case such
representations and warranties will be true and correct as of such date). The
Indemnifying Stockholders shall have the right to supplement and update the
Disclosure Schedule to reflect events
that have occurred between the date of this Agreement and the Closing and could
not have been disclosed at the date of this Agreement; provided, however,
that no such supplemental or updated
information shall be deemed to avoid or cure any misrepresentation or breach of warranty or constitute an amendment of
any breach of representation or warranty made by the Company or any Indemnifying Stockholder as of the date of this
Agreement; and provided, further, however, that such right
shall not be deemed in any way to waive, modify or amend the condition to Closing set forth in
Section 6.1 (i) hereof unless the Parent expressly waives the condition
in writing. The Disclosure Schedule shall be arranged in sections and subsections corresponding to the numbered and
lettered sections and subsections contained in this Article II. The disclosures in any section or subsection of the
Disclosure Schedule shall qualify
any other sections and subsections in this Article II only to the extent it is
clear from a reading of the
disclosure and through written cross-reference that such disclosure is
applicable to such other sections and subsections.

          2.1     Organization,
Qualification and Corporate Power. The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Maryland. The Company is duly qualified to conduct business
and is in good standing under the laws of each jurisdiction listed in
Section 2.1 of the Disclosure Schedule, which jurisdictions constitute the only jurisdictions in which the nature of the
Company’s businesses or the ownership or leasing of its properties requires such qualification, except where the
failure to be so authorized, qualified or licensed would not result in a
Company Material Adverse Effect. The Company has all requisite corporate
power and authority to carry on the businesses in which it is engaged and to own and use the properties owned and used by it.
The Company has furnished to the Parent true, complete and correct
copies of its Articles of Incorporation and By-laws. The Company is not in default under or in violation of any
provision of its Articles of Incorporation or By-laws.

          2.2   Capitalization.

                  (a)    The
authorized capital stock of the Company
consists of Twelve Million (12,000,000) shares of common stock, $0.01
par value per share, of which, as of the date of this Agreement, Five Million One Hundred Seventy-Five Thousand Four Hundred
and Thirty-Five (5,175,435) shares
have been issued and are outstanding.

                  (b)    Section
2.2(b)(i) of the Disclosure Schedule sets
forth a complete and accurate list, as
of the date of this Agreement, of the Company Stockholders, showing the number
of shares of capital stock, and the class or series of such shares, held by
each Company Stockholder. Section 2.2(b)(ii)
of the Disclosure Schedule also indicates all outstanding Company Shares that
constitute restricted stock or that are otherwise subject to a repurchase or redemption right, indicating the name of the
applicable stockholder, the vesting schedule (including any acceleration provisions with respect thereto), and the
repurchase price payable by the
Company. All of the issued and outstanding shares of capital stock of the
Company have

-15-

been duly authorized and
validly issued and are fully paid and nonassessable. All of the issued and outstanding securities of the Company have
been offered, issued and sold by the Company in compliance with all applicable federal and state securities laws.

                  (c)    Section
2.2(c) of the Disclosure Schedule sets
forth a complete and accurate list,
as of the date of this Agreement of: (i) all Company Stock Plans, indicating
for each Company Stock Plan the
number of Company Shares issued to date under such Plan, the number of Company
Shares subject to outstanding options under such Plan and the number of Company
Shares reserved for future issuance
under such Plan; (ii) all holders of outstanding Options, indicating
with respect to each Option the Company Stock Plan under which it was granted,
the number of Company Shares subject to such
Option, the exercise price, the date of grant, the expiration date, the vesting schedule (including
any acceleration provisions with respect thereto), and whether such Option was intended to qualify
as an incentive stock option under Section 422 of the Code; and (iii) all holders of outstanding Warrants, indicating
with respect to each Warrant the
agreement or other document under which it was granted, the number of shares of
capital stock, and the class or series of such shares, subject to such
Warrant, the exercise price, the date of issuance and the expiration date
thereof. The Company has provided to the Parent complete and accurate copies of all Company Stock Plans,
forms of all stock option agreements evidencing Options and all
Warrants. All of the shares of capital stock of the Company subject to Options and Warrants will be, upon issuance
pursuant to the exercise of such instruments, duly authorized, validly issued, fully paid and nonassessable.

                  (d)    Except
as set forth in Section 2.2(d)(i) of the
Disclosure Schedule, (i) no subscription,
warrant, option, convertible security or other right (contingent or otherwise)
to purchase or acquire any shares of
capital stock of the Company is authorized or outstanding, (ii) the Company has no obligation (contingent or
otherwise) to issue any subscription, warrant, option, convertible
security or other such right, or to issue or distribute to holders of any
shares of its capital stock any evidences of
indebtedness or assets of the Company, and (iii) the Company has no
obligation (contingent or otherwise) to purchase, redeem or otherwise acquire any shares of its capital stock or any interest
therein or to pay any dividend or to make any other distribution in respect thereof. Except as set
forth in Section 2.2(d)(ii) of the Disclosure Schedule, there are no outstanding or authorized stock appreciation,
phantom stock or similar rights with
respect to the Company.

                  (e)    Except
as set forth in Section 2.2(e) of the
Disclosure Schedule, there is no outstanding agreement, written or oral,
between the Company and any holder of its securities, or, to the best of the Company’s Knowledge, among any
holders of its securities, relating to the sale or transfer (including
agreements relating to rights of first refusal, co-sale rights or “drag-along”
rights), registration under the Securities Act, or voting, of the capital stock
of the Company.

          2.3   Authorization
of Transaction. The Company has all requisite power, capacity and authority
to execute and deliver this Agreement and to perform its obligations hereunder.
Except as set forth in Section 2.3 of
the Disclosure Schedule, the execution and delivery by the Company of this Agreement and the consummation by
the Company of the transactions contemplated
hereby have been duly and validly authorized by all necessary corporate action
on the part of the Company, including
the Requisite Stockholder Approval. This Agreement has been duly and validly executed and delivered by
the Company and constitutes a valid and

-16-

binding
obligation of the Company, enforceable against the Company in accordance with
its terms, except to the extent such
enforceability is subject to the effect of any applicable bankruptcy, insolvency, reorganization,
moratorium or other law affecting or relating to creditors rights generally and
general principles of equity (regardless of whether such enforceability is
considered in proceeding in equity or law).

          2.4    Noncontravention.
Subject to the filing of the Articles of Merger as required by the MGCL, neither the execution and delivery by the
Company of this Agreement, nor the consummation
by the Company of the transactions contemplated hereby, will (a) conflict with
or violate any provision of the Articles of Incorporation or By-laws of the
Company, (b) require on the part of
the Company any notice to or filing with, or any permit, authorization, consent
or approval of, any Governmental Entity, (c) except as set forth in
Section 2.4(c) of the Disclosure Schedule,
conflict with, result in a breach of, constitute (with or without due notice or
lapse of time or both) a default
under, result in the acceleration of obligations under, create in any party the right to terminate, modify or cancel, or
require any notice, consent or waiver under, any contract or instrument of a value in excess of $50,000 per year or
duration in excess of 12 months to
which the Company is a party or by which the Company is bound or to which any
of their respective assets is subject,
(d) result in the imposition of any Security Interest upon any assets of the Company, or (e) violate any order,
writ, injunction, decree, statute, rule or regulation applicable to the Company or any of its properties or
assets.

          2.5    Subsidiaries. The Company does
not control directly or indirectly or have any direct or indirect equity participation or similar
interest in any corporation, partnership, limited liability company, joint venture, trust or other
business association or entity.

          2.6    Financial Statements. The Company
has provided to the Parent the Financial
Statements, copies of which are
attached to Section 2.6 of the Disclosure Schedule. Except for the adjustments listed on Section 1.6(d)(i) of
the Disclosure Schedule which have not been made to the Financial Statements, the Financial Statements have been prepared
in accordance with GAAP applied on a
consistent basis throughout the periods covered thereby, fairly present the consolidated financial condition, results of
operations and cash flows of the Company as of the respective dates
thereof and for the periods referred to therein and are consistent with the
books and records of the Company; provided,
however, that the Financial Statements referred to in clause (b) of the definition of such term are
subject to normal recurring year-end adjustments (which will not be material) and do not include footnotes. Except as set
forth in Section 2.6 of the Disclosure Schedule, there are no material
differences from the information included in the footnotes to the audited Financial Statements that would be disclosed in
footnotes to the unaudited Financial
Statements if such footnotes had been prepared.

          2.7    Absence of Certain Changes. Since
the Most Recent Balance Sheet Date, the Company has operated its business only in the
Ordinary Course of Business, and, except as set forth on Section 2.7 of the Disclosure Schedule:

                   (a)    the
Company has not incurred any Debt other than changes in the principal balance
of the Company’s line of credit;

-17-

                 (b)    the
Company has not made any acquisition (by
merger, consolidation, or acquisition
of stock or assets or otherwise) of any other Person;

                 (c)    the
Company has not created any Security Interest
on any of its assets, tangible or
intangible;

                 (d)    except
for sales to customers of the Company’s
products and services in the Ordinary
Course of Business, the Company has not sold, assigned or transferred any of
its tangible assets;

                 (e)    the
Company has not entered into or amended (i)
any customer agreement with a Person
that is or would be a Significant Person or (ii) any agreement, other than a customer agreement, that is or would be a
Material Contract;

                 (f)    the
Company has not (i)
entered into or amended any employment or severance or similar agreement with any employee or any collective
bargaining agreement, (ii) adopted or
amended, or increased the payments to or benefits under, any profit sharing, bonus, thrift, stock option, deferred
compensation, savings, insurance, restricted stock, pension, retirement,
or other employee benefit plan for or with any of its directors, officers or
employees or (iii) granted any increase in
compensation payable or to become payable or the benefits provided to its directors, officers or employees,
other than in the Ordinary Course of Business;

                 (g)    the
Company has not (i)
made or changed any Tax election or (ii) made any material change in any method of accounting or accounting practice
used by it, other than any such
changes required by GAAP;

                 (h)    the
Company has
conducted and reflected in its books and records each transaction referenced in Section 2.26 of the
Disclosure Schedule on an arm’s-length basis;

                 (i)    there
has been no
change, event or development that has had, individually or in the aggregate, a Company Material Adverse
Effect;

                 (j)    there
has not been any
material casualty, loss, damage or destruction (whether or not covered by insurance) to any asset of the Company;

                 (k)    the
Company has not
made any single expenditure or commitment to purchase personal property or for additions to property, plant and
equipment in excess of $25,000;

                 (l)    the
Company has not
issued, sold or otherwise disposed of any debenture, note, stock, or equity interest or modified or
amended any right of any holder thereof;

                 (m)    the
Company has not
amended, terminated, waived, disposed of, or permitted to lapse, any material license or Permit;

                 (n)    there
has not been any
amendment to the Articles of Incorporation or By-laws of the Company; and

-18-

                      (o)     the
Company has not
materially altered the nature of its business or business plan.

          2.8       Undisclosed
Liabilities. Except as provided in Section 2.8 of the
Disclosure Schedule, the Company has
no liability (whether known or unknown, whether absolute or contingent, whether liquidated or unliquidated and
whether due or to become due), except for (a) liabilities shown or reserved for on the Most Recent Balance Sheet,
(b) liabilities which have arisen
since the Most Recent Balance Sheet Date in the Ordinary Course of Business and
(c) contractual and other liabilities incurred
in the Ordinary Course of Business which are not required by GAAP to be
reflected on a balance sheet or that would not otherwise be required to be disclosed in the footnotes of the Company’s
financial statements if such footnotes had been prepared, (d) liabilities incurred in connection with the negotiation of
this Agreement and specifically set
forth in Section 2.8 of the Disclosure Schedule and clearly identified as “liabilities not reflected on the Most Recent
Balance Sheet,” and (e) liabilities specifically and clearly set forth
in other sections of the Disclosure Schedule and clearly identified as
“liabilities not reflected on the Most
Recent Balance Sheet.”

          2.9       Taxes.

                      (a)       The
Company has properly filed on a timely basis
all Tax Returns that it is and was required to file, and all such Tax Returns
were true, correct and complete in all respects. Except as set forth in
Section 2.9(a) of the Disclosure Schedule, the Company has properly paid on a timely basis all Taxes, whether or not shown
on any of its Tax Returns, that were due and payable. All Taxes that the
Company is or was required by law to withhold or collect have been withheld or collected and, to the extent
required, have been properly paid on a timely basis to the appropriate Governmental Entity. The Company has
complied with all information reporting and back-up withholding requirements including maintenance of the
required records with respect
thereto, in connection with amounts paid to any employee, independent
contractor, creditor or other third
party.

                      (b)       The
unpaid Taxes of the Company for periods through
the date of the Most Recent Balance
Sheet Date do not exceed the accruals and reserves for Taxes (excluding
accruals and reserves for deferred Taxes established to reflect timing
differences between book and Tax
income) set forth on the Most Recent Balance Sheet.

                      (c)       The
Company is not and has never been a member of
any group of corporations with which
it has filed (or been required to file) consolidated, combined, or unitary Tax Returns. The Company has no actual or
potential liability under Treasury Regulation Section 1.1502-6 (or any
comparable or similar provision of federal, state, local, or foreign law), or
as a transferee or successor, by contract,
or otherwise for any Taxes of any Person (including without limitation any affiliated, combined, or unitary
group of corporations or other entities that included the Company during a prior Taxable period). The Company is not
a party to, bound by, or obligated under any Tax allocation, Tax sharing, Tax
indemnity or similar agreement.

                      (d)       The
Company has delivered to the Parent (i)
complete and correct copies of all
income Tax Returns of the Company relating to Taxes for all Taxable periods for
which the applicable statute of
limitations has not yet expired and (ii) complete and correct copies of all

-19-

private
letter rulings, revenue agent reports, information document requests, notices
of proposed deficiencies, deficiency notices, protests, petitions, closing
agreements, settlement agreements, pending ruling requests and any
similar documents submitted by, received by or agreed to by or on behalf of the Company relating to Taxes for all
Taxable periods for which the applicable statute of limitations has not yet
expired. The income Tax Returns of the Company have not been audited by the Internal Revenue Service or
other applicable Governmental Entity or are closed by the applicable statute of limitations for all periods through
and including the Taxable period
specified in Section 2.9(d) of the Disclosure Schedule. The Company has
delivered or made available to the
Parent complete and correct copies of all other Tax Returns of the Company relating to Taxes for all Taxable periods
for which the applicable statute of limitations has not yet expired. No examination or audit of any Tax Return of the
Company by any Governmental Entity is
currently in progress or, to the Knowledge of the Company, threatened or contemplated,
and the Company does not know of any basis upon which a Tax deficiency or assessment could reasonably be expected to be
asserted against the Company. The Company has not been informed by any jurisdiction that the jurisdiction believes
that the Company was required to
file any Tax Return that was not filed.

                      (e)       The
Company has not (i) waived any statute of
limitations, which waiver is still in effect, with respect to Taxes or agreed
to extend the period for assessment or collection of any Taxes, (ii) requested any extension of
time within which to file any Tax Return, which Tax Return has not yet been
filed, or (iii) executed or filed any power of attorney relating to Taxes with any Governmental Entity.

                      (f)       The
Company is not a party to any Tax litigation.
The Company is not nor has it ever been a party to any specific transaction
which will result in the imposition of penalties upon the Company by any
taxing authority. The Company is not nor has it ever been a party to any transaction or agreement that is in conflict
with the Tax rules on transfer pricing in any relevant jurisdiction. The Company has disclosed on its federal income
Tax Returns all positions taken
therein that could give rise to a substantial understatement of federal income
Tax within the meaning of Section
6662 of the Code.

                      (g)       Except
as set forth on Section 2.9(g) of the
Disclosure Schedule, there are no
Security Interests or other encumbrances with respect to Taxes upon any of the
assets or properties of the Company,
other than with respect to Taxes not yet due and payable.

                      (h)       The
Company has not been a United States real
property holding corporation within the meaning of Section 897(c)(2) of
the Code during the applicable period specified
in Section 897(c)(l)(A)(ii) of the Code.

                      (i)       Except
as set forth on Section 2.9(i) of the Disclosure
Schedule, the Company has not made
any payments, nor is it obligated to make any payments, nor is it a party to any agreement, contract, arrangement, or plan
that could obligate it to make any payments, that are or could be, separately
or in the aggregate, “excess parachute payments” within the meaning of Section 280G of the Code (without
regard to Sections 280G(b)(4) and 280G(b)(5) thereof). No excise Tax
will be imposed upon the Company as a result of the acceleration of Options.

-20-

                        (j)       No
Company Stockholder holds Company Shares that
are non-transferable and subject to
a substantial risk of forfeiture within the meaning of Section 83 of the Code
with respect to which a valid election under Section 83(b) of the Code
has not been made, and no payment to any
Company Stockholder of any portion of the consideration payable pursuant to this Agreement will result in compensation or
other income to such Company Stockholder with respect to which the Parent or
the Company would be required to deduct or withhold any Taxes.

                        (k)       None
of the assets of the Company (i) is property
that is required to be treated as being owned by any other person pursuant to
the provisions of former Section 168(f)(8) of the Internal Revenue Code
of 1954, (ii) is “tax-exempt use property” within the meaning of Section 168(h) of the Code, (iii) directly or indirectly
secures any debt the interest on which
is tax exempt under Section 103(a) of the Code, or (iv) is subject to a lease
under Section 770l(h) of the Code
or under any predecessor section.

                        (l)       The
Company will not be required to include any
item of income in, or exclude any
item of deduction from, Taxable income for any Taxable period (or portion
thereof) ending after the Closing Date as a result of any (i) change in method
of accounting for a Taxable period ending on or prior to the Closing Date (or
as a result of the transactions contemplated by this Agreement) under
Section 481 of the Code (or any corresponding or similar provision of federal, state, local or foreign Tax law); (ii)
“closing agreement” as described in Section 7121 of the Code (or any
corresponding or similar provision of state, local or foreign Tax law) executed
on or prior to the Closing Date; (iii)
deferred intercompany gain or any excess loss account described in Treasury
Regulations under Section 1502 of the Code (or any corresponding or similar provision of state, local or foreign Tax
law); (iv) installment sale or open transaction disposition made on or
prior to the Closing Date; or (v) prepaid amount received on or prior to the Closing Date. The Company currently utilizes,
the accrual method of accounting for income Tax purposes and such method of
accounting has not changed in the past five (5) years.

                        (m)       The
Company has not participated in or cooperated
with an international boycott within
the meaning of Section 999 of the Code.

                        (n)       There
is no limitation on the utilization by the
Company of its net operating losses,
built-in losses, Tax credits, or similar items under Sections 382, 383, or 384
of the Code or comparable provisions of foreign, state or local law (other than
any such limitation arising as a result of the consummation of the transactions
contemplated by this Agreement).

                        (o)       The
Company has not distributed to the Constituents
or security holders stock or
securities of a controlled corporation, nor have stock or securities of the
Company been distributed, in a transaction to which Section 355 or Section 361
of the Code applies.

                        (p)       The
Company is not nor has it ever been required
to make a basis reduction pursuant
to Treasury Regulation Section 1.1502-20(b) or Treasury Regulation Section 1.337(d)-2(b).

                        (q)       Section
2.9(q) of the Disclosure Schedule sets
forth each jurisdiction (other than
United States federal) in which the Company files, or, is required to file or
has been required to file a Tax
Return or is or has been liable for Taxes on a “nexus” basis and each

-21-

jurisdiction that has
sent notices or communications of any kind requesting information relating to
the Company’s nexus with such jurisdiction.

                        (r)    [Intentionally
omitted].

                        (s)    There
is no basis for the assertion of any claim
relating or attributable to Taxes,
which, if adversely determined, would result in any Security Interest on the assets
of the Company, or would reasonably be expected to have a material adverse
effect on the Company.

          2.10       Assets.

                        (a)    Except
as set forth in Section 2.10(a) of the
Disclosure Schedule, the Company is the true and lawful owner, and has good
title to, all of the assets (tangible or intangible) purported to be
owned by the Company, free and clear of all Security Interests. The Company owns or leases all tangible assets
sufficient for the conduct of its businesses as presently conducted.
Each such tangible asset is free from material defects, has been maintained in accordance with normal industry practice, is
in good operating condition and repair (subject to normal wear and tear) and is suitable for the
purposes for which it presently is used and contemplated to be used per such business plan.

                        (b)    Section
2.10(b) of
the Disclosure Schedule lists (i) all fixed assets (within the meaning of GAAP)
of the Company having a book value greater than $5,000, indicating the cost, accumulated book depreciation (if any) and
the net book value of each such fixed asset as of the Most Recent Balance Sheet
Date, and (ii) all other assets of a tangible nature (other than inventories) of the Company whose book value
exceeds $5,000.

                        (c)    Each
item of equipment, motor vehicle and other
asset that the Company has possession
of pursuant to a lease agreement or other contractual arrangement is in such condition that, upon its return to its lessor or
owner under the applicable lease or contract, the obligations of the Company to such lessor or owner
to maintain such item will have been discharged
in full and no additional amounts will be due and owing thereunder.

          2.11       Owned Real
Property. The Company does not own, and has never owned,
any real property.

          2.12       Real Property Leases.
Section 2.12 of the Disclosure Schedule lists
all Leases and lists the term of such
Lease, any extension and expansion options, and the rent payable thereunder. The Company has delivered to the Parent
complete and accurate copies of the Leases. With respect to each Lease:

                        (a)    such
Lease is legal, valid, binding, enforceable
and in full force and effect;

                        (b)    except
as disclosed on Section 2.12 of the
Disclosure Schedule, such Lease will
continue to be legal, valid, binding, enforceable and in full force and effect immediately following the Closing in accordance
with the terms thereof as in effect immediately prior to the Closing;

-22-

                        (c)     the
Company is not in breach or violation of, or
default under, any material provision of such Lease, and no event has
occurred, is pending or, to the Knowledge of the
Company, is threatened, which, after the giving of notice, with lapse of time,
or otherwise, would constitute a
breach or default of a material provision by the Company or, to the Knowledge of the Company, any other party under
such Lease and to the Knowledge of the Company, each parcel of Leased
Real Property is in compliance in all material respects with all applicable Laws and Governmental Orders. Except as
set forth in Section 2.12(c) of the Disclosure
Schedule, the Lease for each parcel of Leased Real Property is in full force
and effect, there are no defaults under such leases by the Company, or,
to the Knowledge of the Company, any other
party to such leases;

                        (d)     there
are no disputes, oral agreements or
forbearance programs in effect as to
such Lease;

                        (e)     the
Company has not assigned, transferred, conveyed, mortgaged, deeded in trust or encumbered any interest in the
leasehold or subleasehold;

                        (f)     based
on the Company’s experience during the past full fiscal year and up to the Closing Date, all facilities leased or
subleased thereunder are supplied with utilities and other services adequate for the operation of said
facilities;

                        (g)     to
the
Company’s Knowledge there is not any Security Interest, easement, covenant or other restriction applicable to the
real property subject to such lease which materially impairs the current uses or the occupancy by the
Company of the property subject thereto; and

                        (h)     other
than the
rental payment amounts set forth in Section 2.12 of the Disclosure Schedule, no
other amounts are owed or reasonably likely to be owed by the Company with respect to any parcel of Leased Real
Property.

          2.13       Intellectual
Property.

                        (a)     Section
2.13(a) of the Disclosure Schedule lists
(i) each patent, patent application, copyright registration or application
therefor, and trademark, service mark and domain name registration or application therefor of the Company and (ii)
each Customer Deliverable of the
Company.

                        (b)     The
Company owns or has the right to all Company
Intellectual Property reasonably necessary (i) to use, sell, market and
distribute the Customer Deliverables and (ii) to operate the Business. Each item of Company Intellectual Property will
be owned or available for use by the
Surviving Corporation immediately following the Closing on substantially
identical terms and conditions as it was owned or available for use by
the Company immediately prior to the Closing,
except as described in Section 2.13(b) of the Disclosure Schedule. No current
or former employee of the Company has
any claim or right in or to the Company Intellectual Property. The Company
has taken commercially reasonable measures to protect the proprietary nature of each item of Company Intellectual
Property, and to maintain in confidence all trade secrets and
confidential information, that it owns or uses. No other Person has any rights
to any of the Company Intellectual Property
owned by the Company (except pursuant to agreements or licenses specified in Section 2.13(d) of the
Disclosure Schedule), and, to the Knowledge of the

-23-

Company,
no other Person is infringing, violating or misappropriating any of the Company
Intellectual Property, except as
described in Section 2.13(b) of the Disclosure Schedule.

                        (c)     None
of the Company Intellectual Property,
Customer Deliverables, or the sale,
marketing, distribution, provision or use thereof, infringes or violates, or
constitutes a misappropriation of, any
Intellectual Property rights of any Person. Section 2.13(c) of the Disclosure Schedule lists any complaint, claim or
notice, or threat thereof, received by the Company alleging any infringement,
violation or misappropriation; and the Company has provided to the Parent complete access to all
written documentation in the possession of the Company relating to any
such complaint, claim, notice or threat. The Company has provided to the Parent
complete access to all written documentation in the Company’s possession
relating to claims or disputes known to the
Company concerning any Company Intellectual Property.

                        (d)     Section
2.13(d) of the Disclosure Schedule
identifies each license or other agreement
pursuant to which the Company has licensed, distributed or otherwise granted
any rights to any third party with
respect to, any Company Intellectual Property or any Intellectual Property owned
by a party other than the Company. Except as described in Section 2.13(d) of the Disclosure Schedule, the Company has not
agreed to indemnify any Person against any infringement, violation or misappropriation of any Intellectual Property
rights with respect to any Customer Deliverables. The Company is not,
nor will it or any party hereto be as a result of the execution and delivery of this Agreement or the performances of its
obligations under this Agreement, in
breach of any license, sublicense or other agreement relating to the Company Intellectual Property.

                        (e)     Section
2.13(e) of the Disclosure Schedule identifies each item of Intellectual Property used or possessed by the
Company that is owned by a party other than the Company, and the license or
agreement pursuant to which the Company uses it (excluding off-the-shelf
software programs licensed by or to the Company pursuant to nonnegotiable
standard form, mass market or
“shrink wrap” licenses).

                        (f)     Except
as set forth in Section 2.13(f) of the
Disclosure Schedule, all of the copyrightable materials (but excluding
materials created, developed or otherwise provided by a third party) embedded in, or integrated in, incorporated in or bundled
with the Customer Deliverables have
been created by employees of the Company within the scope of their employment by the Company, or by independent
contractors of the Company who have executed agreements expressly
assigning all right, title and interest in such copyrightable materials to the
Company. Except as set forth in Section 2.13(f) of the Disclosure Schedule, no
portion of such copyrightable materials was
jointly developed with any third party.

                        (g)     Except
as set forth in Section 2.13(g) of the
Disclosure Schedule, the Customer
Deliverables, the Internal Systems, and the Company Intellectual Property are
free from significant defects or
programming errors, and conform in all material respects to the written documentation and specifications
therefore.

                        (h)     The
Internal
Systems, Customer Deliverables, and the Company Intellectual Property currently used by the Company to provide products
and services to their customers (i)
are fully adequate for the business of the Company as of the date of this
Agreement

-24-

(ii) meet the normal and customary requirements of
customers under the customer contracts of the
Company, and (iii) will meet, or are capable of being scaled to meet, the
normal and customary requirements of
existing customers under the customer contracts.”

          2.14      Contracts.

                      
(a)     Section
2.14 of the Disclosure Schedule lists the following agreements (written or oral) to which the Company is a party
as of the date of this Agreement (each, a “Material Contract”):

                                 (i)       any
agreement (or group of related agreements) for the lease of personal
property from or to third parties providing for lease payments in excess of
$10,000 per annum or having a remaining term longer than six months;

                                 (ii)      any
agreement (or group of related agreements) with
software vendors, distributors or
sales agents allowing for the resale, marketing or distribution of the
Company’s services of products;

                                 (iii)     any
agreement concerning confidentiality or containing covenants restraining or
limiting the freedom of the Company to engage in any line of business or
compete with any Person including, without
limitation, by restraining or limiting the right to solicit customers or
that could reasonably be expected, following the Closing, to restrain or limit
the freedom of the Parent or any Affiliate
thereof to engage in any line of business or compete with any Person;

                                 (iv)     any
agreement containing a right of first refusal;

                                 (v)      any
agreement (or
group of related agreements) that is terminable upon or prohibits a
change in ownership or control of the Company, or that requires consent in
connection with a change in ownership or control of the Company;

                                 (vi)     any
agreement (or group of related agreements) that provides for the Company to be the exclusive or a preferred
provider of any product or service to any Person or the exclusive or a preferred recipient of any product or service of
any Person during any period of time or that otherwise involves the
granting by any Person to the Company of exclusive or preferred rights of any
kind;

                                 (vii)    any
agreement (or group of related agreements)
that provides for any Person to be the exclusive or a preferred provider
of any product or service to the Company, or the exclusive or a preferred
recipient of any product or service of the Company during any period of time or that otherwise involves the
granting by the Company to any Person of exclusive or preferred rights
of any kind;

                                 (viii)   any
agreement (or group of
related agreements) in which a party has
agreed to purchase at least $10,000 worth of goods or services per year or that
includes specific service level commitments;

-25-

                               (ix)       any
agreement (or group of related agreements) in which the Company has granted manufacturing rights, “most
favored nation” or similar pricing provisions or marketing or
distribution rights relating to any products or territory;

                               (x)        any
agreement (or group of related agreements) under which it has created,
incurred, assumed or guaranteed (or may create, incur, assume or guarantee)
Debt or under which it has imposed (or may impose) a Security Interest on any
of its assets, tangible or intangible;

                               (xi)       any
agreement for the disposition of any
significant portion of the assets or
business of the Company (other than sales of products in the Ordinary Course of
Business) or any agreement for the acquisition of the assets or business
of any other entity (other than purchases of
inventory or components in the Ordinary Course of Business);

                               (xii)      any
employment or
consulting agreement;

                               (xiii)     any
agreement
still in effect involving any current or former officer, director or
stockholder of the Company or an Affiliate thereof;

                               (xiv)     any
agreements that by their terms bind Affiliates of the Company or will
bind current Affiliates of the Company after the Closing;

                               (xv)      any
agreement under which the consequences of a default or termination would
reasonably be expected to have a Company Material Adverse Effect;

                               (xvi)     any
agreement which contains any provisions requiring the Company to
indemnify any other party;

                               (xvii)    any
agreement regarding Intellectual Property
(excluding off-the-shelf software
programs licensed by or to the Company pursuant to nonnegotiable standard form,
mass market or “shrink wrap”
licenses); and

                               (xviii)   any
other
agreement (or group of related agreements) involving more than the
expenditure of $50,000 per year.

                      (b)    The
Company has made available to the Parent a complete and accurate copy of each agreement listed in Section 2.13 or
Section 2.14 of the Disclosure Schedule, or with respect to each such unwritten agreement, the Company has provided a
detailed description of the terms of
such unwritten agreement. With respect to each agreement so listed: (i) the agreement
is legal, valid, binding and enforceable and in full force and effect; (ii) the
agreement will continue to be legal, valid, binding and enforceable and in full
force and effect immediately following the Closing in accordance with the terms
thereof as in effect immediately prior to the Closing; and (iii) except as set
forth on Section 2.14(b)(iii) of the Disclosure Schedule, neither the Company
nor, to the Knowledge of the Company, any other party, is in breach or
violation of, or default under, any material provision of such agreement, and
no event has occurred, is pending or, to the
Knowledge of the Company, is threatened, which, after the giving of notice, with
lapse of time, or otherwise, would constitute a breach or default of any
material provision of

-26-

such agreement by the Company or, to the Knowledge of
the Company, of any other party under such
agreement.

          2.15     Accounts Receivable. Each
and all accounts receivable of the Company
reflected on the Final Balance Sheet
are valid receivables enforceable and fully collectible (i) in the ordinary course of business as historically
collected or (ii) by December 31, 2010, whichever is sooner, free and
clear of any claim, right of setoff or other dispute, demand or future
obligation of any nature whatsoever all net of any applicable allowance for
doubtful accounts reflected in the Final
Balance Sheet. The Company has not received any written notice from an account debtor stating that any such account receivable is
subject to any contest, claim or setoff by such account debtor.

          2.16     Powers of Attorney. Except
as set forth in Section 2.16 of the
Disclosure Schedule, there are no outstanding powers of attorney
executed on behalf of the Company.

          2.17     Insurance. Section 2.17 of
the Disclosure Schedule lists each insurance policy (including fire, theft/crime, casualty,
comprehensive general liability, workers compensation, business interruption, environmental, errors and
omissions, directors and officers fiduciary liability, employment practices liability, product liability and
automobile insurance policies and bond
and surety arrangements) to which the Company is a party, all of which are in
full force and effect, including the
name of the insurer, policy numbers and whether such policy is a claims-made or occurrence policy. Except as set
forth in Section 2.17 of the Disclosure Schedule, there is no claim pending or, to the Knowledge of the Company,
any existing facts which are reasonably likely to result in a claim under
any such policy, and if any of the foregoing have been disclosed, no such claim
or existing facts were questioned, denied or disputed by the underwriter of such policy. All premiums due and
payable under all such policies have been paid. The Company has not been denied
insurance coverage at any time during the past five years and no
policies have been cancelled or have been refused to be renewed by the insurer
in the past five years except as set forth
in Section 2.17 of the Disclosure Schedule. The Company has no Knowledge of any threatened termination of,
or premium increase with respect to, any such policy except as set forth in Section 2.17 of the Disclosure
Schedule. Each such policy will continue
to be enforceable and in full force and effect immediately following the
Closing in accordance with the terms thereof as in effect immediately
prior to the Closing. The Company has not
failed to timely give any notice required or failed to satisfy any
subjectivities under such insurance policies or binders of insurance.

          2.18     Litigation.
Except as set forth in Section 2.18 of the Disclosure Schedule, there is no Legal Proceeding which is pending or, to the
Knowledge of the Company, has been threatened against the Company. There
are no judgments, orders or decrees outstanding against the Company.

          2.19     Warranties.

                      (a)     Except
as set forth in Section 2.19 of the Disclosure Schedule, no Customer Deliverable is subject to any guaranty, warranty,
right of credit or other indemnity. Section 2.19 of the Disclosure Schedule sets forth the aggregate expenses incurred by
the Company in fulfilling its
obligations under its guaranty, warranty, right of credit and other indemnity

-27-

provisions during each of the
fiscal years and the interim period covered by the Financial Statements; and to the Knowledge of the Company
there is no reason such expenses should significantly increase as a percentage of sales in the future, provided
that the Surviving Corporation is operated in a manner substantially
consistent with the manner the Company was operated during the one-year period
immediately prior to Closing.

                      (b)     The
Company has no
liability arising out of any injury to individuals or property as a result of
the ownership, possession, or use of any product manufactured, sold, leased
or delivered by the Company.

          2.20     Employees.

                     
(a)     Section 2.20 of the Disclosure Schedule contains a
list of all employees of the Company,
along with the position and the annual rate (or hourly rate, where applicable)
of compensation of each such person.

                     
(b)     The Company is not a party to or bound by any
collective bargaining agreement, and
has not experienced any strikes, grievances, claims of unfair labor practices
or other collective bargaining
disputes. The Company has not committed any unfair labor practice. The Company has no Knowledge of any organizational
effort made or threatened, either currently
or within the past two years, by or on behalf of any labor union with respect
to employees of the Company.

                     
(c)     All material employee expenses and benefits shall
have been accrued on the Final Balance Sheet for all periods prior to
and up through the date thereof.

                     
(d)     To the Knowledge of the Company, no officer, Key
employee or group of employees has any plans to terminate employment
with the Company.

          2.21     Employee
Benefits.

                      (a)     Section
2.21(a) of the Disclosure Schedule contains a complete and accurate
list of all Company Plans. Complete and accurate copies of documents embodying
each of the Company Plans and related plan
documents including (without limitation) plan documents, trust
documents, group annuity contracts, plan amendments, insurance policies or contracts, participant agreements, employee
booklets, administrative service agreements, summary plan descriptions, plan summaries or descriptions, minutes,
resolutions, compliance and nondiscrimination tests for the last three
plan years, standard COBRA forms and related notices,
registration statements and prospectuses, and, to the extent still in its
possession, any material employee
communications relating thereto, have been provided to the Parent. With respect
to the Company Plan which is subject to ERISA reporting requirements, the
Company has provided copies of the Form 5500 reports and any applicable
financial statements, including schedules and reports filed for the last five
years. The Company has furnished Parent with the most recent Internal Revenue
Service determination or opinion letter issued with respect to each such Company Plan which is intended to be a
qualified plan as described in Code Section 401(a), and nothing has occurred since the issuance of
each such letter which could reasonably be expected to cause the loss of tax-qualified status of any Company Plan
subject to Code Section 401(a).

-28-

                      (b)     Each
Company Plan has been administered in
accordance with its terms and in compliance with the requirements
prescribed by any and all statutes, rules and regulations (including ERISA and the Code), except as would not
have, in the aggregate, a Company Material
Adverse Effect, and the Company, and the ERISA Affiliates have performed all material
obligations required to be performed by them under, and are not in material
default or violation by any other party to, any Company Plan and all required
contributions required to be made by the Company or any ERISA Affiliate to any
Company Plan have been made. All filings and
reports as to each Company Plan subject to ERISA have prepared in good faith
and timely filed, all requisite governmental reports (which were true and
correct as of the date filed) have prepared
in good faith and timely filed and the Company has properly and timely filed
and distributed or posted all notices and reports to employees or
participants in the Company Plans required
to be filed, distributed or posted. There has been no “prohibited transaction,”
as such term is defined in Section 406
of ERISA or Section 4975 of the Code, with respect to any Company Plan and neither the Company or any ERISA
Affiliate is subject to or, to the Knowledge
of the Company, threatened, claimed or alleged to be subject to, any liability
or penalty under Sections 4976
through 4980 of the Code or Title I of ERISA with respect to any Company Plan. With respect to each Company Plan no
“reportable event” within the meaning of Section 4043 of ERISA (excluding any such event for which the thirty
(30) day notice requirement has been
waived under the regulations to Section 4043 of ERISA) nor any event described in Section 4062, 4063 or 4041 of ERISA
has occurred. No Company Plan has assets that include securities issued by the Company or any ERISA Affiliate and
no Company Plan constitutes a
security which is required to be registered under applicable state or federal securities laws. There has been no amendment to,
written interpretation or announcement by the Company or any ERISA
Affiliate above the level of expense incurred with respect to that Plan for the most recent fiscal year included in the
Company’s financial statements.

                      (c)     No
suit, investigation, audit, administrative
proceeding, action, or other litigation
(except claims for benefits payable in the normal operation of the Company
Plans and proceedings with respect to
qualified domestic relations orders) has been brought, or to the knowledge of the Company is threatened, against or
with respect to any Company Plan or asserting
any rights or claims to benefits under any Company Plan, including audit or
inquiry by the IRS or United States Department of Labor.

                      (d)     With
respect to all Company Plans that are intended
to be qualified under Section 401(a)
of the Code, the Company has either obtained and is entitled to rely on determination letters from the Internal Revenue
Service to the effect that such Company Plans are qualified under Sections 401(a) and 501(a) of the Code, including all amendments to the Code which
are currently effective and the plans and the trusts related thereto are exempt
from federal income taxes under Sections 401(a) and 501(a), respectively, of the Code, or the Company has time remaining
to apply under applicable Treasury Regulations or Internal Revenue Service
pronouncements for a determination letter or opinion letter and no act or omission has occurred, that would adversely affect
its qualification or materially increase its cost. Each Company Plan that is required to satisfy Section 401(k)(3) or
Section 401(m)(2) of the Code has
been tested for compliance with, and satisfies the requirements of Section
401(k)(3) and Section 401(m)(2) of the Code for each plan year ending
prior to the Closing Date.

-29-

                      (e)     The
Company has not nor has any ERISA Affiliate
ever maintained, established, sponsored, participated in, contributed to, or is
obligated to contribute to, or otherwise
incurred any obligation or liability (including, without limitation, any
contingent liability) under any
“multiemployer plan” as defined in Section 3(37) of ERISA or to any “pension plan” (as defined in Section 3(2) of
ERISA) subject to Section 412 of the Code or Title IV of ERISA. Neither the Company nor any ERISA
Affiliate has any actual or potential withdrawal liability (including,
without limitation, any contingent liability) from any complete or partial withdrawal (as defined in Sections 4203 and
4205 of ERISA) from any multiemployer plan.

                      (f)     With
respect to each Company Plan, the Company and each of its ERISA Affiliates have complied in all material respects
with the following to the extent applicable to such Company Plan: (i) the applicable healthcare continuation and notice
provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985
(“COBRA”) and the regulations thereunder
or any state law governing health care coverage extension or continuation; (ii)
the applicable requirements of the
Family Medical Leave Act of 1993 and the regulations thereunder; (iii) the applicable requirements of
the Health Insurance Portability and Accountability
Act of 1996 and any rules or regulations promulgated pursuant thereto (“HIPAA”); and (iv) the applicable requirements of
the Cancer Rights Act of 1998 and the Newborn and Mother’s Health
Protection Act of 1996. The Company has no material unsatisfied obligations to
any employees, former employees, or qualified beneficiaries pursuant to COBRA,
HIPAA, or any state law governing health care coverage extension or
continuation.

                      (g)     There
are no unfunded obligations under any
Company Plan providing benefits after termination of employment to any
employee of the Company (or to any beneficiary of any such employee), including but not limited to retiree health
coverage or other retiree welfare
benefits and deferred compensation, but excluding continuation of health
coverage required to be continued under Section 4980B of the Code or
other applicable law and insurance conversion
privileges under state law. The assets of each Company Plan that is funded are reported
at their fair market value on the books and records of such Company Plan.

                      (h)     No
act or
omission has occurred and no condition exists with respect to any Company Plan that would subject the Company or
any ERISA Affiliate to (i) any material fine, penalty, tax or liability of any kind imposed under ERISA or the
Code or (ii) any contractual
indemnification or contribution obligation protecting any fiduciary, insurer or
service provider with respect to any Company Plan.

                      (i)      No
Company Plan is funded by, associated with or related to a “voluntary employee’s beneficiary association” within the
meaning of Section 501(c)(9) of the Code.

                      (j)      Each
Company Plan
may be amended, terminated or otherwise discontinued unilaterally by the Company at any time without liability
or expense to the, Company (or after the Closing Date, the Parent) or
such Company Plan as a result thereof (other than
for benefits accrued through the date of termination or amendment and
reasonable administrative expenses
related thereto) and no Company Plan, plan documentation or agreement, summary plan description or other written
communication distributed generally to

-30-

employees by its terms prohibits
the Company from amending, terminating or otherwise discontinuing any
such Company Plan.

                      (k)     Section
2.2l(k) of
the Disclosure Schedule discloses each: (i) agreement with any
stockholder, director, executive officer or other key employee of the Company
(A) the benefits of which are contingent, or
the terms of which are altered, upon the occurrence of a transaction
involving the Company of the nature of any of the transactions contemplated by
this Agreement, (B) providing any term of
employment or compensation guarantee or (C) providing severance benefits or other benefits after the
termination of employment of such director, executive officer or key employee; (ii) agreement, plan or arrangement
under which, absent the stockholder vote to be taken pursuant to Section
5.9, any person may receive payments from the Company that may be subject to
the tax imposed by Section 4999 of the Code or included in the determination of such person’s “parachute payment”
under Section 280G of the Code (without regard to Sections 280G(b)(4)
and 280G(b)(5) thereof); (iii) agreement or plan binding the Company, including any stock option plan, stock
appreciation right plan, restricted stock plan, stock purchase plan,
severance benefit plan or Company Plan, any of the benefits of which will be
increased, or the vesting of the benefits of which will be accelerated, by the
occurrence of any of the transactions
contemplated by this Agreement or the value of any of the benefits of which will
be calculated on the basis of any of the transactions contemplated by this
Agreement. Any Company Plan which is a deferred compensation plan as defined in
Code Section 409A is either exempt from Code Section 409A or is in compliance
with Code Section 409A.

                      (l)     Section
2.21(1) of
the Disclosure Schedule sets forth the policy of the Company with respect to accrued vacation, accrued
sick time and earned time off and the amount of such liabilities as of
the date of this Agreement. The information set forth in Section 2.21(1) of the
Disclosure Schedule shall be updated by the Company as of the last day of the
payroll period ending prior to the Closing Date.

                      (m)    The
Company has classified all individuals who perform services for the Company correctly under the Company Plans, ERISA
and the Code as common law employees, independent contractors, leased
employees, and exempt or non-exempt employees.

                      (n)     The
Company has
not engaged in any transaction with respect to any Company Plan that is
the same as or substantially similar to any transaction that the Internal Revenue Service has determined to be a tax
avoidance transaction and has identified as a listed transaction in
published guidance under 26 CFR. Section 1.6011-4(b)(2).

                      (o)     All
Company Plans
and any other benefits to be continued on by Surviving Corporation or Parent pursuant to Section 5.11 (a) below may
be so continued without a material breach or violation of such plans and
benefits and without increased cost to the Surviving
Corporation or Parent of more than 120% of the costs on a per capita basis
incurred by the Company for such plans and benefits during the one year
period immediately prior to Closing.

-31-

          2.22     Environmental
Matters.

                      (a)     The
Company has complied with all applicable Environmental Laws and Environmental Permits. There is no pending or to
the Company’s Knowledge threatened civil or criminal litigation, written
notice of violation, formal administrative proceeding, or investigation,
inquiry or information request by any Governmental Entity, relating to any
Environmental Law and Environmental Permits involving the Company or any
properties owned or leased by it.

                      (b)     The
Company is not, and shall not be, subject to
any environmental liability of any
solid or hazardous waste transporter or treatment, storage or disposal facility
that has been used by the Company.

                      (c)     There
has been no Release of any Hazardous Material
on any of the Leased Real Property or
on any property formerly owned, leased, used or occupied by the Company.

                      (d)     There
are no claims pending or to the Company’s
Knowledge threatened against the
Company under any Environmental Law regarding or related to any of the Leased Real Property.

                      (e)     To
the Company’s Knowledge, the Company is not
subject to any actual or alleged liability, whether fixed or contingent,
under any Environmental Law.

          2.23     Legal
Compliance.

                      (a)     The
Company is currently conducting, and has at all times conducted, its businesses
in compliance in all material respects with each applicable law (including
rules and regulations thereunder) of any federal, state, local or foreign
government, or any Governmental Entity. The Company (including any Affiliates)
has not received any notice or communication from
any Governmental Entity (i) alleging noncompliance with any applicable law,
rule or regulation or (ii) regarding
any possible, pending or threatened investigation by any Governmental Entity.

                      (b)     Subject
to paragraph (c) below, the Company
complies with and has implemented all such measures required for it to
comply with its obligations as a Covered Entity for its “Health Plan” and as a Business Associate of its “Covered
Entity”
(as such capitalized terms are
defined in HIPAA and the regulations promulgated thereunder), including without
limitation, the privacy and security
regulations (45 C.F.R. 160 and 164) and the transaction and code set regulations (45 C.F.R. 162) promulgated
under HIPAA. With respect to any HIPAA regulatory
requirements, including any contractual privacy and security commitments for “Protected Health Information” (as that term is
defined in the HIPAA privacy and security regulations), for which the Company’s (including any Affiliates)
compliance with HIPAA is required (collectively, the “HIPAA
Commitments”),

                               (i)       the
Company is in material compliance with the
HIPAA Commitments;

-32-

                                (ii)      the
transactions contemplated by this Agreement
will not violate any of the HIPAA Commitments;

                                (iii)     the
Company has
not received written inquiries from the U.S. Department of Health and Human Services or any other Governmental Entity
regarding the Company’s compliance with the HIPAA Commitments; and

                                 (iv)     the
HIPAA
Commitments have not been rejected by any applicable certification organization
which has reviewed such HIPAA Commitments or to which any such HIPAA Commitment
has been submitted.

                      (c)      The
Company has either
entered into or made reasonable and good faith efforts to enter into
valid, written Business Associate agreements with all customers that are
Covered Entities and with all contractors, agents, vendors, suppliers, and
service providers that are Business Associates of the Company.

          2.24     Customers and
Suppliers. Section 2.24 of the Disclosure Schedule sets
forth a list of (a) the top 25
customers of the Company by revenue under contract as of July 31, 2008 and (b) the top 10 suppliers by expenses incurred for
the thirty-six (36) months ended July 31, 2008 that are significant
suppliers (as measured by actual use of such product by the Company or the Company’s customers as of the Closing Date) of any
significant product or service to the Company (each such customer or
supplier, a “Significant Person”).

          2.25     Permits.
Section 2.25 of the Disclosure Schedule sets forth a list of all material Permits issued to or held by the Company. Such
listed Permits are the only material Permits that are required for the
Company to conduct their respective businesses as presently conducted or as contemplated to be conducted by any business plans
or projections delivered by the Company to the Parent. Each such Permit
is in full force and effect; the Company is in compliance with the terms of
each such Permit; and, to the Knowledge of the Company, no suspension or
cancellation of such Permit is threatened.
There is no basis for believing that such Permit will not be renewable upon expiration. Each such Permit will
continue in full force and effect immediately following the Closing.

          2.26     Certain Business
Relationships With Affiliates. Except as set forth in Section 2.26 of the
Disclosure Schedule, no Affiliate of the Company (a) owns any property or
right, tangible or intangible, which
is used in the business of the Company, (b) has any claim or cause of action against the Company, or (c) owes any
money to, or is owed any money by, the Company. Section 2.26 of the
Disclosure Schedule describes any transactions or relationships between the Company and any Affiliate thereof
which occurred or have existed since the beginning of the time period
covered by the Financial Statements.

          2.27     Brokers’ Fees. Except
as set forth in Section 2.27 of the Disclosure Schedule, neither the Company, nor any Company Stockholder
nor any other party with whom or for whom
the Company or Company Stockholders may have contracted has any liability or obligation to pay any fees, commissions or any
other amounts of any kind whatsoever to any broker, finder or agent with
respect to the transactions contemplated by this Agreement.

-33-

          2.28     Books and Records.
The minute books and other similar records of
the Company contain complete and
accurate records of all actions taken at any meetings of the Company’s stockholders,
Board of Directors or any committee thereof and of all written consents
executed in lieu of the holding of any such meeting. The books and records of
the Company accurately reflect in all
material respects the assets, liabilities, business, financial condition and
results of operations of the Company
and have been maintained in accordance with good business and bookkeeping
practices. Section 2.28 of the Disclosure Schedule contains a list of all
accounts and safe deposit boxes of the
Company (including the name of each bank, trust company, savings institution, brokerage firm, mutual fund
or other financial institution with which the Company has an account or safe deposit box) and the names of persons
having signature authority with respect thereto or access thereto.

          2.29     Compliance
with Healthcare Laws and Regulations.

                      (a)     Without
limiting the generality of Section 2.23 or any other representation or warranty made by the Company herein, the
Company is conducting and has conducted its business and operations in compliance with, and neither the Company nor any
of its officers, directors or
employees has engaged in any activities prohibited under, all applicable civil
or criminal statutes, laws,
ordinances, rules and regulations of any federal, state, local or foreign Governmental Entity with respect to regulatory
matters relating to the provision, administration, and/or payment for
healthcare products or services (collectively, “Healthcare Laws”),
including, without limitation, (i)
rules and regulations governing the operation and administration of Medicare, Medicaid,
or other federal health care programs; (ii) 42 U.S.C. § 1320a-7(b), commonly
referred to as the “Federal Anti-Kickback Statute,” (iii) 42 U.S.C. § 1395nn, commonly referred to as the “Stark
Law,” (iv) 31
U.S.C. §§ 3729-33, commonly referred to as the “False Claims Act” and (v) rules and regulations of the U.S. Food
and Drug Administration.

                      (b)     The
Company has not received any notice or
communication from any Governmental
Entity alleging noncompliance with any Healthcare Laws. There is no civil, criminal or administrative action, suit, demand,
claim, complaint, hearing, investigation, notice, demand letter, warning letter, proceeding or
request for information pending against the Company and the Company has no liability (whether actual or contingent)
for failure to comply with any
Healthcare Laws. There is no act, omission, event or circumstance that would reasonably
be expected to give rise to any such action, suit, demand, claim, complaint,
hearing, investigation, notice, demand
letter, warning letter, proceeding or request for information or any such
liability. There has not been any violation of any Healthcare Laws by the
Company in its submissions or reports to any
Governmental Entity that could reasonably be expected to require investigation,
corrective action or enforcement action. There is no civil or criminal
proceeding, or, to the Knowledge of the
Company, threatened, relating to the Company or any Company director,
officer or employee that involves a matter within or related to Healthcare
Laws.

                      (c)     Any
remuneration (including, without limitation, a
“discount or reduction in price,” as referenced in 42 U.S.C. §
1320a-7b(b)(3)(A)) exchanged between the Company and its customers, contractors, or other entities with which it has a
business relationship (together, “Trading Partners”) has at all
times been commercially reasonable and represents the fair market value for rendered services or purchased items. No
remuneration exchanged between the Company and its Trading Partners has taken
into account, either directly or indirectly, the

-34-

volume or value of any referrals
or any other federal health care program business generated between the
Company and such Trading Partners.

                      (d)     Neither
the Company nor any of its current
directors, officers, employees, or
Trading Partners or, to the Company’s Knowledge, former directors, officers,
employees or Trading Partners with
respect to the period during which they were associated with the Company, has been debarred or subject to mandatory
or permissive exclusion from participation in Medicare, Medicaid, or any
other federal or state healthcare program.

                      (e)     There
has not been any violation of any Healthcare
Laws by the Company in its maintenance of all records required under any
Healthcare Laws that would give rise to any Company liability for such
violation.

          2.30     Disclosure.
No representation or warranty by the Company contained in this Agreement, and no statement contained in the
Disclosure Schedule or any other document, certificate or other instrument
delivered or to be delivered by or on behalf of the Company pursuant to
this Agreement, contains or will contain any untrue statement of a material
fact or omits or will omit to state any
material fact necessary, in light of the circumstances under which it was or
will be made, in order to make the statements herein or therein not misleading.
The Company hereby expressly disclaims
any representations or warranties contained in the Confidentiality
Agreement attached hereto as Exhibit I, unless such representations or
warranties are made in this Agreement or in
the Disclosure Schedule. Notwithstanding the preceding sentence, no representations or warranties have
been made beyond, or in addition to, those expressly set forth herein and in any other agreements, documents or
instruments executed and delivered in connection with the transactions
contemplated hereunder.

ARTICLE
III 

REPRESENTATIONS AND WARRANTIES OF THE
PARENT

          The
Parent represents and warrants to the Company and the Constituents that the statements contained in this Article III are true
and correct as of the date of this Agreement and will be true and correct as of
the Closing as though made as of the Closing, except to the extent such
representations and warranties are specifically made as of a particular date
(in which case such representations and warranties will be true and
correct as of such date).

          3.1     Organization and Corporate
Power. The Parent is a corporation duly organized, validly
existing and in good standing under the laws of the State of California. The
Parent has all requisite corporate power and
authority to carry on the businesses in which it is engaged and to own
and use the properties owned and used by it.

          3.2     Authorization of
Transaction. The Parent has all requisite power and authority
to execute and deliver this Agreement and to perform its obligations hereunder.
The execution and delivery by the
Parent of this Agreement and the consummation by the Parent of the series of transactions contemplated hereby have been duly
and validly authorized by all necessary corporate action on the part of
the Parent. This Agreement has been duly and validly executed and delivered by the Parent and constitutes a valid
and binding obligation of the Parent, enforceable
against it in accordance with its terms and conditions, except to the extent
such

-35-

enforceability is subject to the effect of any
applicable bankruptcy, insolvency, reorganization, moratorium or other law affecting or relating to creditors’ rights
generally and general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).

          3.3     Noncontravention. Except
for the filing of the Maryland Articles of Merger as required
by the MGCL, neither the execution and delivery by the Parent of this
Agreement, nor the consummation by the Parent of the transactions contemplated
hereby, will (a) conflict with or violate
any provision of the charter or by-laws of the Parent, (b) require on the part
of the Parent any filing with, or
permit, authorization, consent or approval of, any Governmental Entity, (c) conflict
with, result in breach of, constitute (with or without due notice or lapse of
time or both) a default under, result in the acceleration of obligations
under, create in any party any right to
terminate, modify or cancel, or require any notice, consent or waiver under,
any contract or instrument to which
the Parent is a party or by which it is bound or to which any of its assets are
subject, except for (i) any conflict,
breach, default, acceleration, termination, modification or cancellation which
would not adversely affect the consummation of the series of transactions contemplated hereby, or (ii) any notice, consent
or waiver the absence of which would not adversely affect the consummation of the series of transactions
contemplated hereby, or (d) violate
any order, writ, injunction, decree, statute, rule or regulation applicable to
the Parent or any of its properties or assets.

          3.4     Litigation.
Except as set forth on Schedule 3.4, as of the date of this Agreement, there is no action, suit, investigation or
proceeding pending against or, to the Parent’s Knowledge, threatened against or affecting Parent or any of its
respective officers or directors in their capacity as officers or
directors of Parent before any court or arbitrator or any governmental body, agency or official, which in any manner
challenges or seeks to prevent, enjoin, alter or materially delay any of
the series of transactions contemplated hereby.

          3.5     Disclosure. No
representation or warranty by the Parent contained in this Agreement,
and no statement contained in any schedule hereto or any other document,
certificate or other instrument delivered or
to be delivered by or on behalf of the Parent pursuant to this Agreement, contains or will contain any untrue
statement of a material fact or omits or will omit to state any material fact necessary, in light of
the circumstances under which it was or will be made, in order to make
the statements herein or therein not misleading.

          3.6     Valid Issuance of Shares.
The Parent Shares issued as part of the Closing Amount
will, when issued and delivered to the Constituents in accordance with the
terms hereof, be duly authorized, validly
issued, fully paid and non-assessable, and issued in compliance with applicable
federal and state securities laws.

          3.7     SEC Filings.

                    (a)     Since
April 1, 2005 and through the date of this Agreement, the Parent has timely
filed all required reports and forms and other documents (including exhibits
and all other information incorporated
therein) with the SEC (the “Parent SEC Filings”). As of their respective
dates (and without giving effect to any amendments or modifications filed after
the Closing Date), the Parent SEC Filings
complied (and each of the Parent SEC filings filed after

-36-

the date of this Agreement but
prior to the Closing Date, will comply) as to form with requirements of
the Securities Act or the Exchange Act, as the case may be, and the rules and regulations of the SEC promulgated thereunder
applicable to such Parent SEC Filings. As of their respective filing
dates, each Parent SEC Filing filed prior to the date of this Agreement
pursuant to the Securities Act or the Exchange Act did not (or in the case of
Parent SEC Filings filed after the date of
this Agreement but prior to the Closing Date, will not) contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements, in the light of the circumstances under
which they were made, not misleading.

                     (b)     Each
of Parent’s
consolidated statements of financial condition or balance sheets included in or incorporated by referenced
into the Parent SEC Filings, including related notes and schedules, fairly presented in all material respects (or, in
the case of Parent SEC Filings filed
after the date of this Agreement but prior to the Closing Date, will fairly
present in all material respects) the consolidated financial position of Parent
and its Subsidiaries as of the date of
such balance sheet and each of the Parent’s consolidated statements of income,
cash flows and changes in stockholders’ equity included in or
incorporated by reference into Parent SEC
Filings, including any related notes and schedules, fairly presented in all
material respects (or, in the case of
Parent SEC Filings filed after the date of this Agreement but prior to the Closing Date, will fairly present in all material
respects) the consolidated results of operations, cash flows and changes
in stockholders’ equity, as the case may be, of Parent and its Subsidiaries for
the periods set forth therein (subject, in the case of unaudited statements, to
normal year-end audit adjustments), in each
case in accordance with GAAP consistently applied during the periods involved (except as may be noted therein
and except, in the case of unaudited statements, for the absence of
notes).

          3.8     Material
Adverse Change. Except as has been publicly disclosed or is publicly disclosed prior to the date of this Agreement,
since July 29, 2008, there have been no transactions, conditions or
events which, individually, or in the aggregate constitute or has had a Parent Material Adverse Effect. Since January 1,
1998, the Parent has not received written notice from the SEC that it will require the Parent to restate any of
the financial statements of the Parent
included in the Parent SEC Filings or that the SEC is making an investigation
of the Parent’s financial statements
or accounting practices.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE PARENT AND MERGER SUB

REGARDING MERGER SUB

          The
Parent and Merger Sub, jointly and severally, represent and warrant to the
Company and the Constituents that the statements contained in this Article IV
are true and correct as of the date of this Agreement and will be true and
correct as of the Closing as though made as of the Closing, except to the
extent such representations and warranties are specifically made as of a particular date (in which case such
representations and warranties will be true and correct as of such date).

          4.1     Organization
and Corporate Power. The Merger Sub is a corporation duly organized, validly existing and in good standing
under the laws of the State of Maryland. The

-37-

Merger Sub has all requisite corporate power and
authority to carry on the businesses in which it is engaged and to own and use
the properties owned and used by it.

          4.2     Authorization of
Transaction. The Merger Sub has all requisite power and authority
to execute and deliver this Agreement and to perform its obligations hereunder.
The execution and delivery by the Merger Sub
of this Agreement and the consummation by the Merger Sub of the series of transactions contemplated hereby have been
duly and validly authorized by all
necessary corporate action on the part of the Merger Sub. This Agreement has been duly and validly executed and delivered by
the Merger Sub and constitutes a valid and binding obligation of the Merger Sub, enforceable against it in accordance
with its terms and conditions, except
to the extent such enforceability is subject to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium
or other law affecting or relating to creditors’
rights generally and general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law).

          4.3    Noncontravention. Except
for the filing of the Maryland Articles of Merger as required
by the MGCL, neither the execution and delivery by the Merger Sub of this
Agreement, nor the consummation by the
Merger Sub of the series of transactions contemplated hereby, will (a)
conflict with or violate any provision of the charter or by-laws of the Merger
Sub, (b) require on the part of the Merger
Sub any filing with, or permit, authorization, consent or approval of, any
Governmental Entity, (c) conflict with, result in breach of, constitute (with
or without due notice or lapse of time or both) a default under, result in the
acceleration of obligations under, create
in any party any right to terminate, modify or cancel, or require any notice,
consent or waiver under, any contract or instrument to which the Merger Sub is
a party or by which it is bound or to
which any of its assets are subject, except for (i) any conflict, breach,
default, acceleration, termination,
modification or cancellation which would not adversely affect the consummation of the series of transactions
contemplated hereby or (ii) any notice, consent or waiver the absence of which would not adversely
affect the consummation of the series of transactions contemplated
hereby, or (d) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to the Merger Sub or any of its properties or assets.

          4.4     Litigation.
As of the date of this Agreement, there is no action, suit, investigation or proceeding pending against or, to the Merger
Sub’s Knowledge, threatened against or affecting Merger Sub or any of
its respective officers or directors in their capacity as officers or directors of Merger Sub before any court or
arbitrator or any governmental body, agency or official, which in any
manner challenges or seeks to prevent, enjoin, alter or materially delay any of
the series of transactions contemplated hereby.

          4.5     Disclosure.
No representation or warranty by the Merger Sub contained in this Agreement,
and no statement contained in any schedule hereto or any other document,
certificate or other instrument delivered or to be delivered by or on behalf of
the Merger Sub pursuant to this Agreement, contains or will contain any untrue
statement of a material fact or omits or will omit to state any material fact
necessary, in light of the circumstances under which it was or will be made, in
order to make the statements herein or therein not misleading.

-38-

ARTICLE
V
PRE-CLOSING AND POST-CLOSING COVENANTS

          5.1     Closing
Efforts.  Each of the Parties shall use its Reasonable Best Efforts to take
all actions and to do all things necessary, proper or advisable to consummate
the transactions contemplated by this Agreement, including using its Reasonable
Best Efforts to ensure that (i) its representations and warranties remain true
and correct in all material respects through the Closing Date and (ii) the
conditions to the obligations of the other Parties to consummate the Merger are
satisfied.

        5.2      Governmental
and Third-Party Notices and Consents. 

                   (a)     
Each Party shall use its Reasonable Best Efforts to obtain, at its expense, all
waivers, permits, consents, approvals or other authorizations from Governmental
Entities, and to effect all registrations, filings and notices with or to
Governmental Entities, as may be required for such Party to consummate the
transactions contemplated by this Agreement and to otherwise comply with all
applicable laws and regulations in connection with the consummation of the
transactions contemplated by this Agreement.

                   (b)     The
Company shall use its Reasonable Best Efforts to obtain, at its expense, all
such waivers, consents or approvals from third parties, and to give all such
notices to third parties, as are required to be listed in the Disclosure
Schedule or resulting from the delivery requirements set forth in Section 6.

          5.3    Operation
of Business.  Except as contemplated by this Agreement, during the period
from the date of this Agreement to the Closing, the Company shall conduct its
operations in the Ordinary Course of Business and in compliance with all
applicable laws and regulations and, to the extent consistent therewith, use
its Reasonable Best Efforts to preserve intact its current business
organization, keep its physical assets in good working condition, keep
available the services of its current officers and employees and preserve its
relationships with customers, suppliers and others having business dealings
with it to the end that its goodwill and ongoing business shall not be impaired
in any material respect. Without limiting the generality of the foregoing,
prior to the Closing, the Company shall not, without the written consent of the
Parent:

                   (a)     except
pursuant to the exercise of existing Options or the removal of restrictions on
any restricted stock of the Company, issue or sell any stock or other
securities of the Company or any options, warrants or rights to acquire any
such stock or other securities, or amend any of the terms of (including the
vesting of) any options, warrants or restricted stock agreements, or repurchase
or redeem any stock or other securities of the Company;

                   (b)     split,
combine or reclassify any shares of its capital stock; or declare, set aside or
pay any dividend or other distribution (whether in cash, stock or property or
any combination thereof) in respect of its capital stock;

                  
(c)    create, incur or assume any indebtedness
(including obligations in respect of capital leases), other than changes in the
principal balance of the Company line of credit; assume, guarantee, endorse or
otherwise become liable or responsible (whether directly,

-39-

contingently
or otherwise) for the obligations of any other Person; or make any loans,
advances or capital contributions to, or investments in, any other Person;

                   (d)     enter
into, adopt or amend any Employee Benefit Plan or any employment or severance
agreement or arrangement of the type described in Section 2.21 (k) or increase
in any manner the compensation or fringe benefits of, or materially modify the
employment terms of, its directors, officers or employees, generally or
individually, or pay any bonus or other benefit to its directors, officers or
employees (except for (i) existing payment obligations listed in Section 2.21
of the Disclosure Schedule, (ii) the bonuses listed in Section 5.3(d) of the
Disclosure Schedule, which bonus shall be accrued for on the Final Balance
Sheet and paid by the Surviving Corporation with ten (10) Business Days after
the Closing Date, or (iii) bonuses otherwise paid in the Ordinary Course of
Business and not in excess of $10,000) or hire any new officers or (except in
the Ordinary Course of Business) any new employees;

                   (e)     acquire,
sell, lease, license or dispose of any assets or property other than purchases
and sales of assets in the Ordinary Course of Business with a value not in
excess of $50,000;

                  
(f)     mortgage or pledge any of its property or
assets or subject any such property or assets to any Security Interest;

                   (g)     discharge
or satisfy any Security Interest or pay any obligation or liability other than
in the Ordinary Course of Business;

                   (h)     amend
its Articles of Incorporation, By-laws or other organizational documents;

                   (i)     change
its accounting methods, principles or practices, except insofar as may be
required by a generally applicable change in GAAP, or make any new elections,
or changes to any current elections, with respect to Taxes;

                   (j)      enter
into, amend, terminate, take or omit to take any action that would constitute a
violation of or default under, or waive any rights under, any contract or
agreement of a nature required to be listed in Section 2.12, Section 2.13 or
Section 2.14 of the Disclosure Schedule (other than new customer agreements
providing for the payment by the customer of not more than $100,000 per annum
individually or $400,000 per annum for all such agreements in the aggregate);

                   (k)     make
or commit to make any capital expenditure in excess of $50,000 per item or
$100,000 in the aggregate;

                   (l)     institute
or settle any Legal Proceeding;

                   (m)    take
any action of a nature required to be listed in Section 2.7 of the Disclosure
Schedule;

                   (n)     take
any action or fail to take any action permitted by this Agreement with the
knowledge that such action or failure to take action would result in (i) any of
the

-40-

representations
and warranties of the Indemnifying Stockholders or of the Company set forth in
this Agreement becoming untrue or (ii) any of the conditions to the Merger set
forth in Article VI not being satisfied; or

                    (o)    agree
in writing or otherwise to take any of the foregoing actions.

          5.4     Access
to Information. 

          From
the date of this Agreement until the Closing, the Company shall permit
representatives of the Parent to have access (at reasonable times, and in a
manner so as not to unreasonably interfere with the normal business operations
of the Company) to all premises, properties, financial, tax and accounting
records (including the work papers of the Company’s independent accountants),
contracts, other records and documents, and personnel, of or pertaining to the
Company (other than attorney/client privileged information or attorney work
product regarding or related to the drafting and negotiation of this Agreement,
the other agreements and documents contemplated hereby, and transactions
contemplated hereby and thereby). Parent shall not meet with the Company’s
customers and suppliers (in person or otherwise) to discuss, and shall use its
Reasonable Best Efforts not to discuss otherwise with such customers or
suppliers, the Company’s relationship with such customers or suppliers without
informing the Company reasonably in advance of such meeting and giving the
Company the opportunity to be present at such meeting.

          5.5     Notice
of Breaches. 

                    (a)     From
the date of this Agreement until the Closing, the Company shall promptly
deliver to the Parent supplemental information concerning events or
circumstances occurring subsequent to the date hereof which would render any
representation, warranty or statement in this Agreement or the Disclosure
Schedule inaccurate or incomplete at any time after the date of this Agreement
until the Closing. No such supplemental information shall be deemed to avoid or
cure any misrepresentation or breach of warranty or constitute an amendment of
any representation, warranty or statement in this Agreement or the Disclosure
Schedule unless Parent expressly agrees in writing.

                    (b)     From
the date of this Agreement until the Closing, the Parent shall promptly deliver
to the Company supplemental information concerning events or circumstances
occurring subsequent to the date hereof which would render any representation
or warranty in this Agreement inaccurate or incomplete at any time after the
date of this Agreement until the Closing. No such supplemental information
shall be deemed to avoid or cure any misrepresentation or breach of warranty or
constitute an amendment of any representation or warranty in this Agreement
unless the Stockholder Representatives expressly agree in writing.

          5.6     Exclusivity. 

                    (a)     From
the date of this Agreement until the Closing or otherwise upon termination of
this Agreement, the Company shall not, and the Company shall require each of
its officers, directors, employees, representatives, stockholders and agents
not to, directly or indirectly, (i) initiate, solicit, encourage or otherwise
facilitate any inquiry, proposal, offer or discussion with any party (other
than the Parent) concerning any merger, reorganization,

-41-

consolidation,
recapitalization, business combination, liquidation, dissolution, share exchange,
sale of stock, sale of material assets or similar business transaction
involving the Company or any division of the Company, (ii) furnish any
non-public information concerning the business, properties or assets of the
Company or any division of the Company to any party (other than the Parent or
its representatives) or (iii) engage in discussions or negotiations with any
party (other than the Parent) concerning any such transaction.

                    (b)     The
Company shall immediately notify any party with which discussions or
negotiations of the nature described in paragraph (a) above were pending that
the Company is terminating such discussions or negotiations. If the Company or
any Company Stockholder receives any inquiry, proposal or offer of the nature
described in paragraph (a) above, the Company shall, within three (3) Business
Days after such receipt, notify the Parent of such inquiry, proposal or offer,
including the identity of the other party and the terms of such inquiry,
proposal or offer.

          5.7     Expenses.
Except as expressly set forth in this Agreement, each of the Parties shall bear
its own costs and expenses (including legal, investment banking and accounting
fees and expenses) incurred in connection with this Agreement and the transactions
contemplated hereby. For the avoidance of doubt, the Company shall not pay any
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby including, but not limited to, those fees,
costs and other expenses of Whiteford Taylor & Preston, LLP not otherwise
accrued on the Final Balance Sheet.

          5.8     Proprietary
Information.  From and after the Closing, no Company Stockholder shall
disclose or make use of, and each Company Stockholder shall cause all of his
Affiliates not to disclose or make use of, any knowledge, information or
documents of a confidential nature or not generally known to the public with
respect to the Company or the Parent and their respective businesses (including
the financial information, technical information or data relating to the
Company’s services and names of customers of the Company), except to the extent
that such knowledge, information or documents shall have become public
knowledge other than through improper disclosure by any Company Stockholder or
an Affiliate.

          5.9     Stockholder
Approval. 

                    (a)     The
Company shall call a special meeting of the Company Stockholders as promptly as
practicable and shall use its Reasonable Best Efforts to obtain, as promptly as
practicable, the Requisite Stockholder Approval at the special meeting of
Company Stockholders, all in accordance with the applicable requirements of the
MGCL. In connection with such special meeting of Company Stockholders, the
Company shall provide to the Company Stockholders the Information Statement,
which shall include (A) a summary of the Merger and this Agreement (which
summary shall include a summary of the terms relating to the indemnification
obligations of the Constituents and the authority of the Stockholder
Representatives, and a statement that the adoption of this Agreement by the
Company Stockholders shall constitute approval of such terms), and (B) if
applicable, a statement that appraisal rights are available for the Company Shares
pursuant to Title 3, Subtitle 2 of the MCGL and a copy of such Title 3,
Subtitle 2. The Parent agrees to cooperate with the Company in the preparation
of the Information Statement. The Company agrees not to distribute the

-42-

Information
Statement until the Parent has had a reasonable opportunity to review and
comment on the Information Statement and the Information Statement has been
approved by the Parent (which approval may not be unreasonably withheld,
conditioned or delayed). The Company shall not disclose Parent’s review of such
Information Statement in an effort to solicit support for the Merger, nor shall
any mention of Parent’s review or approval be set forth therein.

                    (b)     The
Company shall ensure that the Information Statement does not contain any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements made, in light of the circumstances under which
they were made, not misleading (provided that the Company shall not be
responsible for the accuracy or completeness of any information concerning the
Parent or the Merger Sub furnished in writing for inclusion of the Information
Statement).

          5.10   Confidentiality.
Each of the parties hereto agrees that the information obtained in any
investigation pursuant to the negotiation and execution of this Agreement or
the effectuation of the transaction contemplated hereby, shall be governed by
the terms of the Confidentiality Agreement attached hereto as Exhibit I, provided,
however, that Parent may make such disclosures as may be required under
applicable law.

          5.11   Employee
Benefit Plans. 

                    (a)     Provided
that the cost to the Surviving Corporation and Parent and any of their
Affiliates is not more than 120% of the costs on a per capita basis incurred by
the Company for such plans and benefits during the one year period immediately
prior to Closing, then for a period of twelve months following the Closing (the
“Transition Period”), the Parent or Surviving Corporation or their Affiliates
will maintain such of the Company’s group medical benefit plans and other
employee benefit plans, programs and policies, or substantially similar plans,
programs and policies, as are in effect as of the Closing and set forth on
Section 5.11 (a) of the Disclosure Schedule. On, or as soon as reasonably
practicable after the end of the Transition Period, the Parent or Surviving
Corporation or their Affiliates will cause the Company’s employees that, as of
such date, have become employees of the Parent or Surviving Corporation or
their Affiliates to be eligible for coverage under a group medical benefit plan
and other employee benefit plans, programs and policies which are the same as
or comparable to those maintained for similarly situated employees of the
Parent or its Affiliates. Nothing set forth herein shall (i) constitute an
offer or guarantee of such employment by Parent, Surviving Corporation or any
of their Affiliates or (ii) constitute an offer or guarantee of by Parent,
Surviving Corporation or any of their Affiliates that it will be able to
maintain such plans or that Parent or Surviving Corporation or any of their
Affiliates will offer any particular employee benefit plan, to any particular
employee or that Parent or Surviving Corporation or any of their Affiliates
will offer any employee benefit plan at all to any of its employees.

                   
(b)     Parent hereby agrees that, from and after the
last day of the Transition Period, Parent shall grant or cause the Surviving
Corporation to grant all employees of the Company who are still employed by
Parent, Surviving Corporation or any of their Affiliates as of the last day
after the Transition Period credit for any service with the Company earned
prior to the end of the Transition Period for: (i) purposes of vacation accrual
under any employee vacation plan or policy established or maintained by Parent,
Surviving Corporation or any of

-43-

their
Affiliates on or after the Transition Period, (ii) eligibility and vesting
under Parent’s, Surviving Corporation’s or any of their Affiliate’s 401k plan
existing as of the end of the Transition Period, and (iii) fulfillment of the
one year eligibility waiting periods requirements under any of Parent’s,
Surviving Corporation’s or any of their Affiliate’s health insurance plan
existing as of the Transition Period. Parent shall amend or cause the Surviving
Corporation to amend its health insurance and retirement plans (to the extent
permitted by such plans) and its vacation plans or policies as necessary to
accommodate the grant of service credit for employees of the Company.

                      (c)     Parent
hereby agrees that, from and after the Closing Date, Parent shall provide, or
cause the Surviving Corporation to provide, continuation of health insurance
coverage pursuant to COBRA to each “qualified beneficiary,” within the meaning
of COBRA and the regulations thereunder, who was continuing coverage under the
Company’s health insurance plans pursuant to COBRA as of the Closing Date, and
to each employee of the Company that become employed by the Parent, Surviving
Corporation or their Affiliates and who is, or becomes, a “qualified
beneficiary” within the meaning of COBRA and the regulations thereunder and who
loses coverage under the Company’s health insurance plans due to a “qualifying
event” within the meaning of COBRA and the regulations thereunder during the
Transition Period.

          5.12     Parent
Options. 

                      (a)     Options
to purchase Parent Shares shall be granted, and agreements representing the
same substantially in the form attached hereto as Exhibit J shall be issued, by
Parent to the Company employees set forth on, and representing the right to
purchase such number of Parent Shares per such employee calculated in
accordance with, Section 5.12(a) of the Disclosure Schedule as soon as
reasonably practical after Closing in accordance with Parent’s plans and
policies regarding the granting of options (including, but not limited to, any
blackout periods), which options to purchase Parent Shares shall in the
aggregate have a Black-Scholes valuation on the date of grant equal to
$1,000,000.

                      (b)     In
addition to the options described in Section 5.12(a), Parent shall grant
options to purchase 50,000 Parent Shares, and issue agreements representing the
same substantially in the form attached hereto as Exhibit K, in accordance with
and subject to the conditions set forth on Section 5.12(b) of the Disclosure
Schedule, the granting of which options to be made in accordance with Parent’s
plans and policies regarding the granting of options (including, but not
limited to, any blackout periods).

          5.13     Bonus
Pool. Surviving Corporation will make available a bonus pool for each of
the first two years following the Closing (the “Bonus Pool”). The terms and
administration of the Bonus Pool and the payment of any amounts thereunder
shall be conducted and made in accordance with Section 5.13 of the Disclosure
Schedule. 

          5.14     Grant
of Certain Authority.  The Surviving Corporation shall grant Mr. Good those
certain authorities as are set forth in Section 5.14 of the Disclosure
Schedule.

-44-

          5.15     Issuance
of Parent Shares.  The Parent shall work in good faith to ensure that the
stock certificates representing the Parent Shares portion of the Closing Amount
be issued to the Constituents entitled thereto as soon as reasonably
practicable after the Closing pursuant to the issuance order referenced in
Section 1.3(b)(iv) above.

ARTICLE
VI

CONDITIONS TO CONSUMMATION OF MERGER

          6.1       Conditions
to Obligations of the Parent and Merger Sub.  The obligation of the Parent
and Merger Sub to consummate the Merger is subject to the satisfaction (or
waiver by the Parent) of the following additional conditions:

                      (a)     Dissenting
Shares (Section 1.8) shall not exceed 4% of the issued and outstanding shares
of the Company;

                      (b)     the
Company shall have obtained at its own expense (and shall have provided copies
thereof to the Parent) all of the waivers, permits, consents, approvals,
novations or other authorizations whatsoever, and effected all of the
registrations, filings and notices which are required on the part of the
Company to consummate the transactions contemplated by this Agreement,
including, but not limited to, the consents set forth in Section 2.4(c) of the
Disclosure Schedule (provided, however, that obtaining the consents, releases
and waivers set forth in Section 1.9(b)(i) of the Disclosure Schedule shall not
be a condition to Closing), and to otherwise comply with all applicable laws
and regulations in connection with the consummation of the series of
transactions contemplated by this Agreement;

                      (c)    
the representations and warranties of the Company and the Indemnifying
Stockholders set forth in this Agreement shall be true and correct in all
material respects as of the Closing except to the extent they pertain to a
different date;

                      (d)     the
Company and each of the Constituents shall each have performed or complied with
in all material respects its or his agreements and covenants required to be
performed or complied with under this Agreement as of or prior to the Closing;

                      (e)     no
Legal Proceeding shall be pending or threatened wherein an unfavorable
judgment, order, decree, stipulation or injunction would (i) prevent
consummation of the series of transactions contemplated by this Agreement or
any one of them, (ii) cause the series of transactions contemplated by this
Agreement or any one of them to be rescinded following consummation or (iii)
have, individually or in the aggregate, a Company Material Adverse Effect, and
no such judgment, order, decree, stipulation or injunction shall be in effect;

                      (f)     the
Company shall have delivered to the Parent the Company Certificate;

                     
(g)    the Parent shall have received the
resignations, effective as of the Closing, of each director and officer of the
Company specified by the Parent;

                      (h)     the
Parent shall have received such other certificates and instruments (including
certificates of good standing of the Company in its jurisdiction of
organization,

-45-

 

certified
charter documents, certificates as to the incumbency of officers and the
adoption of authorizing resolutions) as it shall reasonably request in
connection with the Closing;

                      (i)     Perry
Snyder and Don Good shall have entered into an employment agreement (including
noncompete, invention assignment and non-solicitation provisions) with the
Surviving Corporation that is acceptable to the Surviving Corporation;

                      (j)     all
Company Stock Plans shall have been terminated;

                      (k)     since
the date of this Agreement, there will not have occurred and there will have
been no change, event or development that has had or may reasonably be expected
to have, individually or in the aggregate, a Company Material Adverse Effect;

                      (l)     all
outstanding Options shall have been exercised or terminated and all holders of
Options shall have delivered their respective Option Termination Agreements and
all Company Stock Plans shall have been terminated;

                      (m)    the
Parent shall have received from each Constituent an executed Confidential
Investor Questionnaire in the form attached hereto as Exhibit H;

                      (n)    the
Company shall have obtained the Requisite Stockholder Approval of the Company
Stockholders;

                      (o)    the
Parent shall have received the legal opinion of the Company’s counsel
substantially in the form of Exhibit G, attached hereto, dated as of the
date of this Agreement; and

                      (p)    the
Company shall have purchased tail coverage D&O and employment practices
insurance, and shall have accrued the cost of purchasing tail coverage E&O
insurance, covering any claims made within two (2) years after the Closing Date
that are based upon or relate to acts, events or omissions that occurred any
time prior to Closing, such insurance to have deductibles and coverage amounts
that are no less favorable to the Company and the Surviving Corporation as the
insurance the Company had in place during the six months immediately prior to
Closing. In the event the coverage that would be afforded to the Surviving
Corporation through the purchase of the aforementioned tail coverage E&O
insurance is already covered by Parent’s insurance policies as in place at
Closing and without any additional cost to Parent, the accrual for the cost of
purchasing tail coverage E&O insurance shall be reversed for purposes of
calculating the Final Balance Sheet.

          6.2       Conditions
to Obligations of the Company.  The obligation of the Company to consummate
the Merger is subject to the satisfaction (or waiver by the Company) of the
following additional conditions:

                      (a)     the
Parent shall have obtained at its own expense (and shall have provided copies
thereof to the Company) all of the waivers, permits, consents, approvals or
other authorizations, and effected all of the registrations, filings and
notices which are required on the part of the Parent and/or the Merger Sub to
consummate the series of transactions contemplated

-46-

by
this Agreement and to otherwise comply with all applicable laws and regulations
in connection with the consummation of the series of transactions contemplated
by this Agreement;

                      (b)     the
representations and warranties of the Parent and Merger Sub set forth in this
Agreement shall be true and correct in all material respects as of the Closing
except to the extent they pertain to a different date;

                      (c)     each
of the Parent and the Merger Sub shall have performed or complied with in all
material respects its agreements and covenants required to be performed or
complied with under this Agreement as of or prior to the Closing;

                      (d)     no
Legal Proceeding shall be pending or threatened wherein an unfavorable
judgment, order, decree, stipulation or injunction would (i) prevent
consummation of the transactions contemplated by this Agreement or (ii) cause
the transactions contemplated by this Agreement to be rescinded following
consummation, and no such judgment, order, decree, stipulation or injunction
shall be in effect;

                      (e)     the
Parent shall have delivered to the Company the Parent Certificate;

                      (f)     the
Company shall have received such other certificates and instruments (including
certificates of good standing of the Parent and Merger Sub in their respective
jurisdiction of organization, certified charter documents, certificates as to
the incumbency of officers and the adoption of authorizing resolutions) as it
shall reasonably request in connection with the Closing;

                      (g)     the
Surviving Corporation shall have entered into separate employment agreements
with each of Perry Snyder and Don Good that is reasonably acceptable to each of
such individuals, respectively;

                      (h)     the
Parent shall have delivered to the Stockholder Representatives an executed
Registration Rights Agreement substantially in the form attached hereto as
Exhibit L;

                      (i)     the
Parent’s board of directors shall have approved the option grants contemplated
by Section 5.12 of this Agreement; and

                      (j)     since
the date of this Agreement, there will not have occurred and there will have
been no change, event or development that has had or may reasonably be expected
to have, individually or in the aggregate, a Parent Material Adverse Effect.

-47-

ARTICLE
VII

INDEMNIFICATION

          7.1     Indemnification
by the Constituents. Except as otherwise set forth in this Article VII, the
Indemnifying Stockholders shall severally, and not jointly, indemnify the
Parent in respect of, and hold it harmless against, any and all Damages
incurred or suffered by the Surviving Corporation or the Parent or any
Affiliate thereof resulting from, relating to or constituting the matters set
forth in this Section 7.1. For purposes of clarity, “severally, and not jointly”
as used in the immediately preceding sentence shall relate only to the
respective liability of the Indemnifying Stockholders and shall in no way
prohibit Parent from joining all Indemnifying Stockholders in a single
proceeding to seek indemnification hereunder. In addition to the foregoing, and
not by way of limitation, the Parent’s right to indemnification hereunder shall
not be affected by (i) any investigation conducted by Parent or any of its
Affiliates; or (ii) any disclosures in the Disclosure Schedule that are
referenced in Section 7.1 to the Disclosure Schedule.

                    (a)     Any
breach of any representation or warranty of the Company or the Indemnifying
Stockholders contained in this Agreement (other than any breach or alleged
breach of Section 2.9 of this Agreement which shall be resolved pursuant to
Article VIII of this Agreement) or any other agreement or instrument furnished
by the Company or any Constituent to the Parent, the Merger Sub, the Surviving
Corporation or any other Affiliate of the Parent pursuant to this Agreement, as
though such representations and warranties were restated and made at and as of
the Closing Date;

                    (b)     Any
failure to perform any covenant or agreement of the Company or any Constituent
contained in this Agreement or any agreement or instrument furnished by the
Company or any Constituent to the Parent, the Merger Sub, the Surviving
Corporation or any other Affiliate of the Parent pursuant to this Agreement;

                    (c)     Any
failure of any Constituent to have good, valid and marketable title to the
issued and outstanding Company Shares or Options, as the case may be,
registered in such Constituent’s name, free and clear of all Security
Interests;

                    (d)     Any
costs, fees or expenses (including, but not limited to, attorneys’ fees and
expenses) related to any dissenting Company Stockholder’s right to, or claim or
demand for, appraisal under the MGCL or the settlement or satisfaction thereof;

                    (e)     Any
claim by a Company Stockholder, Option holder or former stockholder or option
or warrant holder of the Company (including, but not limited to, a holder or
former holder of Dissenting Shares), or any other Person, seeking to assert, or
based upon: (i) ownership or rights to ownership of any shares of stock of the
Company which differ from those set forth in the Disclosure Schedule; (ii) any
rights of a stockholder (other than the right to receive the Aggregate
Transaction Consideration pursuant to this Agreement), including any option,
preemptive rights or rights to notice or to vote; (iii) any rights under the
Articles of Incorporation or By-laws of the Company; (iv) any claim that his,
her or its shares were wrongfully repurchased by the Company; (v) any
inaccuracy or misstatement in a Payment Information Certificate, with respect
or related to any Payment Information, or any release or

-48-

disbursement
of any Escrow Amount in accordance with the Payment Information set forth in
any Payment Information Certificate; or

                    (f)     Any
Third Party Actions concerning matters related to the Company which matter
giving rise to the Third Party Action occurred prior to the Closing Date,
regardless of when such Third Party Action is filed or otherwise instituted.

                    (g)     To
the extent any Damages to which the Parent is entitled to indemnification
pursuant to this Article VII consists of (i) fees, costs and expenses of
Parent’s, the Surviving Corporation’s or their Affiliate’s outside legal
counsel and professional advisors or (ii) amounts paid to a third-party as part
of a judgment, settlement or other resolution of a Third Party Claim, then in
such event Parent shall be entitled to indemnification at the rate of 110% of
any such Damages actually incurred by Parent, the Surviving Corporation or
their Affiliates. To the extent any director or employee of the Parent, the
Surviving Corporation or their Affiliates (including, but not limited to,
individuals that may be Constituents) spends time managing, negotiating,
overseeing, preparing for, defending or otherwise focusing their time on claims
or other matters to which the Parent is entitled to indemnification pursuant to
this Article VII, the Parent shall be entitled (in addition to any other
indemnification to which it is entitled hereunder) to indemnification for each
hour (or six minute intervals of a partial hour) spent by any such director or
employee at the rate of 150% of such director’s or employee’s Per Hour Rate.
The Parent shall also be entitled to indemnification pursuant to, and at the
rates set forth in, this Section 7.1(g) for (i) fees, costs and expenses of
Parent’s, the Surviving Corporation’s or their Affiliate’s outside legal
counsel and professional advisors and (ii) time spent by any director or
employee of the Parent, the Surviving Corporation or their Affiliates
(including, but not limited to, individuals that may be Constituents), in
connection with or related to (A) the review, negotiation and approval of the
consents, releases and/or waivers contemplated by Section 1.9(b)(i) of this
Agreement or (B) any dispute regarding or under a contract or agreement to
which consents, releases and/or waivers are required to be obtained pursuant to
Section 1.9(b)(i) of this Agreement.

          7.2     Indemnification
by the Parent. The Parent shall indemnify the Constituents in respect of,
and hold them harmless against, any and all Damages incurred or suffered by the
Constituents resulting from, relating to or constituting:

                    (a)     any
breach of any representation or warranty of the Parent or the Merger Sub
contained in this Agreement or any other agreement or instrument furnished by
the Parent or the Merger Sub to the Company or the Stockholder Representatives
pursuant to this Agreement; or

                    (b)     any
failure to perform any covenant or agreement of the Parent or the Merger Sub
contained in this Agreement or any agreement or instrument furnished by the
Parent or the Merger Sub to the Company or the Stockholder Representatives
pursuant to this Agreement.

-49-

          7.3     Indemnification
Claims.

                    (a)     Notice
of Third Party Actions. An Indemnified Party shall give written
notification to the Indemnifying Party of the commencement of any Third Party
Action. Such notification shall be given within twenty (20) days after receipt
by the Indemnified Party of notice of such Third Party Action, and shall
describe in reasonable detail (to the extent known by the Indemnified Party)
the facts constituting the basis for such Third Party Action and the amount of
the claimed Damages; provided, however, that no delay or failure
on the part of the Indemnified Party in so notifying the Indemnifying Party
shall relieve the Indemnifying Party of any liability or obligation hereunder
except to the extent of any damage or liability caused by or arising out of
such failure.

                    (b)     Indemnification
by the Constituents of Third Party Actions. The obligations and liabilities
of the Constituents with respect to a Third Party Action for which the Parent
is entitled to indemnification pursuant to this Article VII will be subject to
the following terms and conditions. The Parent will have the right (including
the selection of counsel) to defend against, direct the defense of, or settle
any such Third Party Action and any related Legal Proceeding, but the
Stockholder Representatives must reasonably cooperate in the defense thereof.
In connection therewith, the Parent agrees (i) to keep the Stockholder
Representatives reasonably informed of its defense and resolution of the Third
Party Action, (ii) to report to the Stockholder Representatives in writing, at
least quarterly, as to the amount of Damages (including attorneys’ fees and
expenses) incurred as of the date of such report, and (iii) that it will make
reasonable judgments with respect to incurring costs and expenses (including
the selection of outside counsel) in a similar matter and based on similar factors
as it does for similar third party claims for which it has no claim against the
Constituents for indemnification. No compromise, discharge or settlement of, or
admission of liability in connection with, such claims may be effected by the
Parent without the written consent of the Stockholder Representatives (which
consent will not be unreasonably withheld or delayed), unless the Parent has
waived any right to indemnification therefor by the Constituents. So long as
the Parent is conducting the defense of the Third Party Action in accordance
with clause (ii) of this Section 7.3(b), the Stockholder Representatives may
retain separate co-counsel at their sole cost and expense and participate in
the defense of the Third Party Action.

                    (c)     Indemnification
by the Parent of Third Party Actions. The obligations and liabilities of
Parent hereunder with respect to a Third Party Action for which the
Constituents are entitled to indemnification pursuant to this Article VII will
be subject to the following terms and conditions:

                              (i)     The
Parent will have the right, but not the obligation, to defend against and to
direct the defense of any such Third Party Action and any related Legal
Proceeding at the Parent’s sole cost and expense and with counsel of Parent’s
choosing (subject to the approval of the Stockholder Representatives, which
will not be unreasonably withheld or delayed) and the Stockholder
Representatives will reasonably cooperate in the defense thereof. The
Stockholder Representatives may participate in such defense with counsel of
their own choosing, provided that the Parent will not, following written notice
of its election to defend against and direct the defense of any such Third
Party Action, be liable to the Constituents under this Article VII for any fees
of other counsel or any other expenses with respect to the defense of such
Legal Proceeding incurred by the Constituents in connection with the defense of
such Legal Proceeding unless the Constituents are also a party to such Third
Party Action and the

-50-

Stockholder
Representatives determine in good faith that Constituents have available to
them one or more defenses or counterclaims that are inconsistent with those of
the Parent. If the Parent assumes the defense of a Third Party Action, no
compromise, discharge or settlement of, or admission of liability in connection
with, such claims may be effected by the Parent without the written consent of
the Stockholder Representatives (which consent will not be unreasonably
withheld or delayed) unless (x) there is no finding or admission of any
violation of law or any violation of the rights of any Person and no effect on
any other claims that may be made against the Constituents, and (y) the sole
relief provided is monetary damages that are paid in full by the Parent. The
Parent will have no liability with respect to any compromise or settlement of
such claims effected without its written consent (which consent will not be
unreasonably withheld or delayed).

                              (ii)     Notwithstanding
the provisions of Section 7.3(c)(i) of this Agreement, if the Parent fails or
refuses to undertake the defense of such Third Party Action within fourteen
(14) days after delivery of written notification to the Parent of the
commencement of such Third Party Action or if the Parent later withdraws from
such defense, the Stockholder Representatives will have the right to undertake
the defense of such claim with counsel of their own choosing, with the Parent
responsible for the costs and expenses of such defense and bound by any
determination made in such Third Party Action or any compromise or settlement
effected by the Constituents.

                    (d)     In
order to seek indemnification under this Article VII, an Indemnified Party
shall deliver a Claim Notice to the Indemnifying Party. If the Indemnified
Party is the Parent and is seeking to enforce such claim pursuant to the Escrow
Agreement, the Indemnifying Party shall deliver a copy of the Claim Notice to
the Escrow Agent.

                    (e)     Within
20 days after delivery of a Claim Notice, the Indemnifying Party shall deliver
to the Indemnified Party a Response, in which the Indemnifying Party shall
either: (i) agree that the Indemnified Party is entitled to receive all of the
Claimed Amount (in which case the Response shall be accompanied by a payment by
the Indemnifying Party to the Indemnified Party of the Claimed Amount, by check
or by wire transfer, provided that if the Indemnified Party is the Parent and
is seeking to enforce such claim pursuant to the Escrow Agreement, the
Indemnifying Party and the Indemnified Party shall deliver to the Escrow Agent,
within three (3) days following the delivery of the Response, a written notice
executed by both parties instructing the Escrow Agent to release the Claimed
Amount to the Parent from the Escrow Amount); (ii) agree that the Indemnified
Party is entitled to receive the Agreed Amount (in which case the Response
shall be accompanied by a payment by the Indemnifying Party to the Indemnified
Party of the Agreed Amount, by check or by wire transfer, provided that if the
Indemnified Party is the Parent and is seeking to enforce such claim pursuant
to the Escrow Agreement, the Indemnifying Party and the Indemnified Party shall
deliver to the Escrow Agent, within three (3) days following the delivery of
the Response, a written notice executed by both parties instructing the Escrow
Agent to release the Claimed Amount to the Parent from the Escrow Amount); or
(iii) dispute that the Indemnified Party is entitled to receive any of the
Claimed Amount.

                    (f)     During
the 30-day period following the delivery of a Response that reflects a Dispute,
the Indemnifying Party and the Indemnified Party shall use good faith efforts

-51-

to
resolve the Dispute. If the Dispute is not resolved within such 30-day period,
such Dispute shall be settled by final, binding arbitration pursuant to the
Federal Arbitration Act, 9 U.S.C. § 1 et seq., in accordance with the applicable rules
of the American Arbitration Association (“AAA”) in effect at such time, which
will be the sole and exclusive procedures for any such disagreement. The
arbitration will be heard before a sole neutral arbitrator mutually agreed upon
by the Indemnifying Party and the Indemnified Party. If such Parties cannot
agree upon such an arbitrator within ten (10) Business Days after the date
referenced in the first sentence of this subsection (iii), AAA will appoint an
arbitrator with expertise in the general industry of the business engaged in by
the Surviving Corporation. Without limiting the generality of the foregoing,
the arbitrator will have no authority to award any special, punitive,
exemplary, consequential, incidental or indirect losses or Damages. Judgment
upon any award granted in a proceeding brought pursuant to this subsection (f)
may be entered in any court of competent jurisdiction. If the Indemnified Party
is the Parent and is seeking to enforce the claim that is the subject of the
Dispute pursuant to the Escrow Agreement, the Indemnifying Party shall deliver
to the Escrow Agent, promptly following resolution of the Dispute (whether by
mutual agreement, arbitral decision or otherwise), a written notice executed by
both parties instructing the Escrow Agent as to what (if any) portion of the
Escrow Amount shall be released to the Parent and/or the Indemnifying
Stockholders (which notice shall be consistent with the terms of the resolution
of the Dispute). All arbitration proceedings will take place in Philadelphia,
Pennsylvania, unless the Dispute or a portion thereof relates to or involves
(i) a contract or agreement to which consents, releases and/or waivers are
required to be obtained pursuant to Section 1.9(b)(i) of this Agreement, or
(ii) the Parent’s right to indemnification pursuant to the last sentence of
Section 7.1(g), in which case the arbitration proceedings will take place in
Orange County, California. Should it become necessary to resort or respond to
court proceedings to enforce a Party’s compliance with Article VII, such
proceedings will be brought only in the federal or state courts located in
Philadelphia, Pennsylvania or Orange County, California, as applicable
(determined based on the nature of and corresponding location for arbitration
of the Dispute in accordance with the immediately preceding sentence), which
will have exclusive jurisdiction to resolve any disputes with respect to
Article VII, with each Party irrevocably consenting to the jurisdiction thereof. 

          7.4     Survival
of Representations and Warranties. All representations and warranties that
are covered by the indemnification agreements in Section 7.1(a) and Section
7.2(a) of this Agreement shall (a) survive the Closing and (b) shall expire on
the date which is twenty-four (24) months following the Closing Date except for
those representations and warranties concerning Capitalization (Section 2.2),
Taxes (Section 2.9), Employee Benefits (Section 2.21) and Environmental
(Section 2.22), which shall be for their respective statute of limitations. If
an Indemnified Party delivers to an Indemnifying Party, before expiration of a
representation or warranty, either a Claim Notice based upon a breach of such
representation or warranty, or an Expected Claim Notice based upon a breach of
such representation or warranty, then the applicable representation or warranty
shall survive until, but only to the extent of, and for purposes of the
resolution of, the specific matter covered by such notice. If the Legal
Proceeding or written claim with respect to which an Expected Claim Notice has
been given is definitively withdrawn or resolved, the Indemnified Party shall
promptly so notify the Indemnifying Party and if the Indemnified Party has
delivered a copy of the Expected Claim Notice to the Escrow Agent with respect
to such Expected Claim Notice, the Indemnifying Party and the Indemnified Party
shall promptly deliver to the Escrow Agent a written notice executed by both
parties

-52-

instructing
the Escrow Agent to release such retained funds from the Escrow Amount in
accordance with the resolution of such matter pursuant to the terms of the
Escrow Agreement. The rights to indemnification set forth in this Article VII
shall not be affected by (i) any investigation or due diligence conducted by or
on behalf of an Indemnified Party or any knowledge acquired (or capable of
being acquired) by an Indemnified Party, whether before or after the date of
this Agreement or the Closing Date, with respect to the inaccuracy or
noncompliance with any representation, warranty, covenant or obligation which
is the subject of indemnification hereunder or (ii) any waiver by an
Indemnified Party of any Closing condition relating to the accuracy of
representations and warranties or the performance of or compliance with
agreements and covenants.

          7.5     Treatment
of Indemnity Payments. Any payments made to an Indemnified Party pursuant
to this Article VII shall be treated as an adjustment to the Aggregate
Transaction Consideration for Tax purposes.

          7.6     Limitations.

                    (a)     No
claim for indemnity under this Agreement may be made unless (i) the amount of
determined indemnifiable Damages incurred with respect to such claim exceeds
fifteen thousand dollars ($15,000), and (ii) the aggregate of all claims for
Damages exceeds one hundred fifty thousand dollars ($150,000), at which time
claims may be made for the amount of by which the aggregate of all such claims
for Damages exceeds one hundred fifty thousand dollars ($150,000). By way of
example only, if there are a series of claims that aggregate $150,001, then
Parent may make a claim for indemnity in the amount of $1; and thereafter may
make claims for indemnity for the entire amount of such claims. Notwithstanding
anything to the contrary in this Agreement, the Parent’s right to the following
indemnity shall not be subject to the limitations, and shall be without regard
to the threshold amounts, of this Section 7.6(a): (i) the indemnity obligations
set forth in Section 7.1(d) and the last sentence of Section 7.1(g) and (ii)
any Third Party Action regarding or under a contract or agreement to which
consents, releases and/or waivers are required to be obtained pursuant to
Section 1.9(b)(i) of this Agreement.

                    (b)     The
Parent shall be limited to the following rights in satisfying its claims for
Damages under Section 1.6 and 1.8 and Article VII and VIII:

                              (i)     The
Parent shall have the obligation to satisfy any indemnifiable Damages which it
may determine under Sections 1.6 and 1.8 and Articles VII and VIII hereof first
from the Escrow Amount and then as set forth in subsection (ii) hereof.

                              (ii)    To
the extent that the Escrow Amount is insufficient to pay in full any determined
indemnifiable Damages under Sections 1.6 and 1.8 and Articles VII and VIII
hereof, the Parent shall have the right to set off any determined indemnifiable
Damages under Sections 1.6 and 1.8 and Articles VII and VIII hereof against any
amounts payable, but not yet paid, to the Constituents hereunder, including,
without limitation, any additional consideration payable under Sections 1.6 and
1.7 of this Agreement.

-53-

                              (iii)   For
purposes of clarity: (A) except as set forth in Section 7.6(g) below, Parent’s
right to recovery for indemnifiable Damages under Section 1.6 and 1.8 and
Article VII and VIII of this Agreement shall be limited to the remedies
described in Section 7.6(b)(i) and 7.6(b)(ii) above; and (B) Parent shall have
the right to satisfy any indemnifiable Damages in accordance with Sections
7.6(b)(i) and (b)(ii) above against the entire amount of the Escrow Amount and
any and all amounts payable, but not yet paid, to the Constituents hereunder,
not just portions thereof that would otherwise be paid or disbursed to the
Indemnifying Stockholders, and the Constituents understand, acknowledge and
agree (as evidenced by, in the case of the Company Stockholders, the approval
of the Merger and, in the case of the holders of Options, the execution and
delivery of the Option Termination Agreements by such holders of Options) to
the foregoing. Notwithstanding the preceding, except as set forth in Section
7.6(g) below, in no event shall Parent have the right to recover any amount
previously paid to the Constituents or to proceed directly against any
individual Constituent in order to recover for any indemnifiable Damages under
Section 1.6 and 1.8 and Article VII and VIII of this Agreement.

                              (iv)    Notwithstanding
any other provision herein, to the extent that any indemnifiable Damages under
Section 1.6, Section 1.8, Article VII or Article VIII are satisfied, they shall
not otherwise be deducted from Post-Closing Net Income of the Surviving
Corporation for purposes of determining the Earnout Payments.

                    (c)     In
determining the amount of any indemnification obligations under this Article
VII, the amount of any obligation for which indemnification may be claimed by
any Indemnified Party shall be reduced by any insurance proceeds received by
the Indemnified Party (or by any Affiliate of the Indemnified Party) with
respect to the matter that is the subject of the indemnified claim or any tax
benefit actually received as a reduction in tax due or receipt of a tax refund.
Each Indemnified Party (on behalf of itself and its Affiliates) agrees to make
good faith, commercially reasonably efforts to obtain all such insurance
proceeds available to it; provided, however, that no claim for indemnification
shall be conditioned upon the final resolution of such insurance claim – the
proceeds of such claim to be paid back to the Indemnifying Party if collected
after the payment by the Indemnifying Party to the Indemnified Party concerning
such claim.

                    (d)     Notwithstanding
anything to the contrary contained in this Agreement, no claim for indemnity
under this Agreement may be made to the extent such claim relates to amounts
that are accrued for as current liabilities on the Final Balance Sheet as
determined by the parties pursuant to Section 1.6.

                    (e)     In
no event shall Parent’s aggregate indemnity obligation for a breach of the
representations and warranties set forth in Section 3.7 exceed $2,750,000.

                    (f)     The
remedies set forth in this Article VII shall be the exclusive remedy of the
Parties with respect to the matters set forth in this Article VII.

                    (g)     Notwithstanding
anything to the contrary in this Agreement, the limitations set forth in this
Section 7.6, including, but not limited to Section 7.6(f), or elsewhere in this
Agreement shall not apply to claims based on fraud or intentional
misrepresentation on

-54-

the
part of any Indemnifying Stockholder, with respect to which claims the Parent
and its Affiliates reserve any and all rights and remedies to which they may be
entitled at law or in equity; provided, however, that Parent’s right to
recovery under this Section 7.6(g) shall be limited to (i) recovery from the
Escrow Amount, (ii) a right to set off against any amounts payable to the
Constituents hereunder, including, without limitation, any additional
consideration payable under Sections 1.6 and 1.7 of this Agreement and (iii)
recovery directly from the Indemnifying Stockholders up to an amount equal to
the final Adjusted Aggregate Payment Amount received and to be received by the
Indemnifying Stockholders hereunder, but, as to each individual Indemnifying
Stockholder in no event shall such amount be more than such Indemnifying
Stockholder’s Total Share of such damages. For purposes of the immediately
preceding subsection (iii), any Parent Shares received by the Indemnifying
Stockholders hereunder, whether or not then held by such Indemnifying
Stockholder, shall be valued using the Share Valuation Method.

ARTICLE
VIII

TAX MATTERS

          8.1     Tax
Indemnification. The Indemnifying Stockholders shall indemnify and hold
harmless the Parent and the Surviving Corporation, and any successors thereto
or Affiliates thereof, in respect of and against Damages resulting from,
relating to, or constituting (x) a breach of any representation contained in
Section 2.9 of this Agreement, (y) the failure to perform any covenant or
agreement set forth in this Article VIII, and (z) without duplication, the
following Taxes:

                    (a)     Any
Taxes for any Taxable period ending on or before Closing Date due and payable
by the Company and not reserved for on the Final Balance Sheet;

                    (b)     Any
Taxes for any Taxable period ending on or before the Closing Date for which the
Company has any liability as a transferee or successor, or pursuant to any
contractual obligation or otherwise and not reserved for on the Final Balance
Sheet; and

                    (c)     Any
transfer, sales, use, stamp, conveyance, value added, recording, registration,
documentary, filing and other non-income Taxes and administrative fees
(including, without limitation, notary fees) arising in connection with the
consummation of the series of transactions contemplated by this Agreement
whether levied on the Parent, the Surviving Corporation, the Company or any of
the Constituents.

          8.2     Preparation
and Filing of Tax Returns; Payment of Taxes.

                    (a)     The
Parent shall prepare and timely file or shall cause to be prepared and timely
filed all Tax Returns for the Company that are required to be filed (taking
into account extensions) after the Closing Date. The Parent shall make or cause
to be made all payments required with respect to any such Tax Returns.

                    (b)     Any
Tax Return to be prepared and filed for Taxable periods beginning before the
Closing Date and ending after the Closing Date shall be prepared on a basis
consistent with the last previous similar Tax Return to the extent permitted
under applicable law.

-55-

          8.3     Audits,
Assessments, Etc. Whenever any taxing authority sends a notice of an audit,
initiates an examination of the Company, or otherwise asserts a claim, makes an
assessment, or disputes the amount of Taxes for which the Constituents are or
may be liable under this Agreement, the Parent shall promptly inform the
Stockholder Representatives. The failure of the Parent to notify the
Stockholder Representatives promptly shall not relieve the Constituents of any
obligations under this Agreement except to the extent such failure materially
prejudices the Constituents. The Parent shall have the exclusive right to
control any resulting proceedings. The Stockholder Representatives shall have
the right to participate at the Constituents’ own expense, in such proceeding,
or portion thereof, only to the extent such proceeding, or portion thereof, or
determination, or portion thereof, affects the amount of Taxes for which the
Constituents are liable under this Agreement, and the Parent may settle any
such proceeding or determination, or portion thereof, to the extent such
proceeding or determination affects the amount of Taxes for which the
Constituents are liable under this Agreement only with the prior written
consent of the Stockholder Representatives, which consent shall not be
unreasonably withheld.

          8.4     Termination
of Tax Sharing Agreements. All Tax sharing, Tax indemnity or Tax
distribution agreements or similar arrangements with respect to or involving
the Company shall be terminated prior to the Closing Date and, after the
Closing Date, the Parent, the Company, the Surviving Corporation and their
Affiliates shall not be bound thereby or have any liability thereunder for
amounts due in respect of periods ending on or before the Closing Date.

          8.5     Indemnification
Claims.

                    (a)     Scope
of Article VIII. Any claim by any Party relating to a breach by another
Party of its obligations under this Article VIII shall be pursued in accordance
with the procedures for indemnification claims set forth in this Article VIII,
and shall not, except for Section 7.6, otherwise be subject to the terms and
conditions, set forth in Article VII. To the extent there is any inconsistency
between the terms of Article VII and this Article VIII with respect to the
allocation of responsibility between the Company, the Constituents and the
Parent for Taxes relating to the business of the Company, the provisions of
this Article VIII shall govern.

                    (b)     Claim
Procedure. For purposes of clarification, (i) claims for a breach of an
obligation under this Article VIII may be made by a Party at any time prior to
the thirtieth (30th) day after the expiration of the statute of
limitations applicable to the Tax matter to which the claim relates, (ii) in
order to seek indemnification under this Article VIII, the Parent shall deliver
a Claim Notice to the Stockholder Representatives, and if the Parent is seeking
to enforce such claim pursuant to the Escrow Agreement, the Parent shall
deliver a copy of the Claim Notice to the Escrow Agent in the form prescribed
by the Escrow Agreement, (iii) upon delivery of any Claim Notice hereunder, the
applicable representation or warranty shall survive until, but only to the
extent of, and for purposes of the resolution of, the specific matter covered
by such notice, (iv) the Parent and Stockholder Representatives shall promptly
deliver to the Escrow Agent a written notice executed by both parties
instructing the Escrow Agent to release such retained funds of the Escrow
Amount pursuant to the terms of the Escrow Agreement in accordance with
resolution of the matter, and (v) within twenty (20) days after delivery of a
Claim Notice, the Stockholder Representatives shall deliver to the Parent a
Response in which

-56-

the
Stockholder Representatives shall: (1) agree that the Parent is entitled to
receive all of the Claimed Amount (in which case the Stockholder
Representatives and the Parent shall deliver to the Escrow Agent, within three
days following the delivery of the Response, a written notice executed by the
Stockholder Representatives and the Parent instructing the Escrow Agent to
release the Claimed Amount (or, if lesser, the amount remaining in the Escrow
Amount) to the Parent); (2) agree that the Parent is entitled to receive the
Agreed Amount (in which case the Stockholder Representatives and the Parent
shall deliver to the Escrow Agent, within three (3) days following the delivery
of the Response, a written notice executed by the Stockholder Representatives
and the Parent instructing the Escrow Agent to release the Agreed Amount (or,
if lesser, the amount remaining in the Escrow Amount) to the Parent), or (3)
dispute that the Parent is entitled to receive any of the Claimed Amount.

          8.6     Dispute
Resolution. During the thirty (30) day period following the delivery of a
Response that reflects a Dispute, the Parent and the Stockholder
Representatives shall attempt in good faith to resolve the Dispute. If, at the
end of the thirty (30) day period, the Parent and the Stockholder
Representatives have not resolved such Dispute, the Parent and the Stockholder
Representatives shall refer the Dispute for determination to the Accountants
(selected in accordance with Section 1.6(d)(iii)) who shall act as experts, not
as arbitrators, and the parties will be reasonably available and work diligently
to facilitate the Accountants to render a determination within a twenty (20)
day period immediately following the referral to them. A determination by the
Accountants with respect to any item of Dispute submitted to them will be
binding on the Parent and the Constituents. The fees and expenses of the
Accountants shall be borne equally by the Constituents on the one hand and the
Parent on the other hand.

          8.7     Limitations.
The Constituents shall have no right of contribution against the Company or the
Surviving Corporation with respect to any breach by the Company of any of its
representations, warranties, covenants or agreements. Any payments made to the
Parent pursuant to this Article VIII shall be treated as an adjustment to the
Aggregate Transaction Consideration for Tax purposes.

ARTICLE
IX

TERMINATION

          9.1     Termination
of Agreement. The Parties may terminate this Agreement prior to the
Closing, as provided below:

                    (a)     the
Parties may terminate this Agreement by mutual written consent;

                    (b)     the
Parent may terminate this Agreement by giving written notice to the Company in
the event the Company or any Constituent is in breach of any representation,
warranty or covenant contained in this Agreement, and such breach (i)
individually or in combination with any other such breach, would cause the
conditions set forth in clauses (b) or (c) of Section 6.1 not to be satisfied
and (ii) is not cured within twenty (20) days following delivery by the Parent
to the Company of written notice of such breach;

                    (c)     the
Company may terminate this Agreement by giving written notice to the Parent in
the event the Parent or the Merger Sub is in breach of any representation, warranty

-57-

or
covenant contained in this Agreement, and such breach (i) individually or in
combination with any other such breach, would cause the conditions set forth in
clauses (b) and (c) of Section 6.2 not to be satisfied and (ii) is not cured
within twenty (20) days following delivery by the Company to the Parent of
written notice of such breach;

                    (d)     the
Parent may terminate this Agreement by giving written notice to the Company if
the Closing shall not have occurred on or before November 15, 2008 by reason of
the failure of any condition precedent under Section 6.1 (unless the failure
results primarily from a breach by the Parent or the Merger Sub of any
representation, warranty or covenant contained in this Agreement); or

                    (e)     the
Company may terminate this Agreement by giving written notice to the Parent if
the Closing shall not have occurred on or before November 15, 2008 by reason of
the failure of any condition precedent under Section 6.2 (unless the failure
results primarily from a breach by the Company or any Constituent of any
representation, warranty or covenant contained in this Agreement).

          9.2     Effect
of Termination. If any Party terminates this Agreement pursuant to Section
9.1, all obligations of the Parties hereunder shall terminate without any
liability of any Party to any other Party; provided that each Party
shall remain liable for any breach of this Agreement prior to its termination;
and provided, further, that the provisions of Sections 5.8 and
5.10, and this Section 9.2 shall remain in full force and effect and survive
any termination of this Agreement pursuant to the terms of this Article IX.

ARTICLE
X

DEFINITIONS

          For
purposes of this Agreement, each of the following terms shall have the meaning
set forth below.

          “AAA”
shall have the meaning set forth in Section 1.7(f)(iii) of this Agreement.

          “Acceleration
Event” shall mean the occurrence of any of the following events: (i) the
consummation of a transaction that results in the sale or other disposition of
all or a majority of the equity interests or assets of NextGen to a Person that
is not an Affiliate of the Parent or (ii) NextGen is consolidated or merged
with or into or acquired by another Person and NextGen is not the surviving
entity in such transaction, or (iii) the events described in clauses (i) or
(ii) occur with respect to Parent and either (A) the purchasing or surviving
entity has a product of service offering that is competitive with that offered
by the Surviving Corporation, or (B) the operations the Surviving Corporation
are combined with a business division or subsidiary of the purchasing or
surviving entity, as the case may be, so as to make the delineation of actual
financial results for the Surviving Corporation impossible or unreasonably
difficult to calculate.

          “Accountants”
shall have the meaning set forth in Section 1.6(d)(iii) of this Agreement.

          “Accounting
Policies” shall mean the cost accounting policies set forth in Exhibit E
to this Agreement.

-58-

          “Acquired
Person” shall mean any Person engaged in a business, line of business, or
with a product substantially identical to the Business that is acquired
by or otherwise combined with the Surviving
Corporation or Parent or any other Affiliate of Parent which acquisition or combination occurs after the Closing, regardless
of the form or such acquisition or combination (e.g.,
by stock purchase, merger, consolidation or otherwise).

          “Adjusted
Aggregate Payment Amount” shall have the meaning set forth in Exhibit C
to this Agreement.

          “Adjusted
Company Shares Outstanding” shall have the meaning set forth in Exhibit
C to this Agreement.

          “Adjusted
Forecast” shall have the meaning set forth in Exhibit C to this
Agreement.

          “Affiliate”
shall mean any affiliate, as defined in Rule 12b-2 under the Securities Exchange Act of 1934.

          “Agreed
Amount” shall mean part, but not all, of the Claimed Amount as mutually agreed to by (a) Indemnifying Party and
Indemnified Party (for purposes of Article VII) or (b) by Parent and Stockholder Representatives (for
purposes of Article VIII).

          “Aggregate
Exercise Price” shall have the meaning set forth in Exhibit C to
this Agreement.

          “Aggregate
Transaction Consideration” shall mean the sum of (a) the Closing Amount, (b) any Closing Amount Adjustment payable to the
Constituents in accordance with Section 1.6 hereof, (c) the First
Earnout Period Payment, if any, (d) the Second Earnout Period Payment, if any, and (e) any amount released to the
Constituents from the Escrow Amount, both previously paid and then currently
payable as of the applicable Payment Date.

          “Agreement”
shall have the meaning set forth in the first paragraph of this Agreement.

          “AR
Measuring Date” shall have the meaning set forth in Section 1.9(b)(ii) of
this Agreement.

          “Bonus
Pool” shall have the meaning set forth in Section 5.13 of this Agreement.

          “Business”
shall mean the provision of revenue cycle management services as provided by the Company to physician groups and ambulatory
care centers as of the Effective Time, consisting
of outsourced billing management services, claims denial management, software sales, technology support services, account
management services and data management and decision support information technology. As of the Effective Time, the
Company conducts the following functions and activities in order to provide
such services to healthcare providers: (i) comprehensive billing and fee collection;
(ii) printing and mailing of claim forms and electronic submission of
claims and printing and mailing of patient statements; (iii) posting of
payments, management of adjustments and
explanation of benefits reviews; (iv) designing and automating provider-specific sets of decision criteria to
bill, correct and remedy, collect and monitor revenue cycle trends using rules-based analytics (including
Denial Tracker, Resolution Manager and

-59-

Claim
Arrange proprietary software applications); (v) re-selling third-party practice
management software; (vi) training
with regards to and support of, selected third-party software; (vii) client
implementation and customer support; (viii) providing data analytics,
application interfaces, and application hosting; and (ix) routine account
manager client meetings and client performance reviews.

          “Business
Day” means any day that is not a Saturday, Sunday or other day on which
commercial banks in the City of Baltimore, Maryland are required or authorized
by law to be closed.

          “Cash”
shall mean all cash and cash equivalents of the Company as of the Closing (including liquid debt instruments held as assets
of the Company with maturities of three months or less), calculated in
accordance with GAAP and the Accounting Policies.

          “CERCLA”
shall mean the federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended.

          “Claim
Notice” shall mean written notification which contains (i) a description of
the Damages incurred or reasonably expected
to be incurred by the Indemnified Party and the Claimed Amount of such Damages, to the extent then known, (ii) a
statement that the Indemnified Party
is entitled to indemnification under Article VII for such Damages and a reasonable explanation of the basis therefor, and
(iii) a demand for payment in the amount of such Damages.

          “Claimed
Amount” shall mean the amount of any Damages incurred or reasonably expected to be incurred by the Indemnified
Party.

          “Closing”
shall mean the closing of the series of transactions contemplated by this Agreement.

          “Closing
Accounts Receivable” shall mean each and all accounts receivable of the Company as of the Closing Date, net of any
reserves.

          “Closing
Amount” shall mean nineteen million dollars ($19,000,000) consisting of:

	
 

	
 

	
 

	
(i) $16,250,000 in cash; and 

	
 

	
 

	
 

	
(ii) $2,750,000 in Parent
 Shares.

	
 

	
 

	
 

	
The
 Closing Amount shall be (a) reduced or increased by the Estimated Net Debt Adjustment, if any, (b)
 reduced or increased by the Estimated Working Capital Adjustment, if any; and (c) less the $8,000,000 in cash amount
 into the Escrow Amount at Closing.
 The Parent Shares shall be valued
 using the Share Valuation Method.

          “Closing
Amount Adjustment” shall have the meaning set forth in Section 1.6(c) of
this Agreement.

-60-

          “Closing
Date” shall have the meaning set forth in Section 1.2.

          “Closing
Date Working Capital” shall mean, as of the Closing Date and giving effect
to the consummation of the Merger, the excess of the Company’s total current
assets (including accounts receivable and
prepaid expenses but excluding Cash), minus total current liabilities (excluding the current portion of any Debt but
including the Company Closing Expenses), determined in accordance with GAAP and the Accounting Policies, subject
to such other adjustments as may be
specifically set forth on Section 1.6(d)(i) of the Disclosure Schedule.

          “COBRA”
shall have the meaning set forth in Section 2.2 l(f) of this Agreement.

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

          “Company”
shall have the meaning set forth in the first paragraph of this Agreement.

          “Company
Certificate” shall mean a certificate to the effect that each of the
conditions specified in of Section 6.1 of
this Agreement is satisfied in all respects.

          “Company
Closing Expenses” shall mean the expenses incurred by the Company in connection with the consummation of the series of
transactions contemplated hereby, including, without limitation,
transaction-related expenses of counsel and accountants (but not including regular audit fees), printing, filing, investment
banking and financial advisory fees and commissions.

          “Company
Intellectual Property” shall mean the Intellectual Property owned by the Company and used in connection with the
Business.

          “Company
Material Adverse Effect” shall mean any material adverse change, event, circumstance or development with respect to, or
material adverse effect on, (i) the business, assets, liabilities,
capitalization, condition (financial or other), or results of operations of the
Company or (ii) the ability of the Parent to operate the Business in the manner
in which it is conducted at the time of
Closing. For the avoidance of doubt, the Parties agree that the terms “material,” “materially” or
“materiality” as used
in this Agreement with an initial lower case “m” shall have their respective customary and ordinary meanings, without
regard to the meaning ascribed to
Company Material Adverse Effect.

          “Company
Plan” shall mean any Employee Benefit Plan maintained, or contributed to,
by the Company or any ERISA
Affiliate.

          “Company
Shares” shall mean the shares of common stock, $0.01 par value per share,
of the Company.

          “Company
Stock Plan” shall mean any stock option plan or other stock or
equity-related plan of the Company.

          “Company
Stockholders” shall mean the stockholders of record of the Company immediately prior to the Effective Time.

-61-

          “Constituents”
shall mean each of:

	
 

	
 

	
 

	
          (i)     the
 Company Stockholders holding Company Shares (excluding Dissenting Shares), including those holders of
 Options who exercise their Options immediately
 prior to Closing; and

	
 

	
 

	
 

	
          (ii)    those
 holders whose Options are delivered to Parent for cancellation and who execute Option Termination Agreements in
 accordance with Section 1.3(b)(ii) hereof.

          “Customer
Deliverables” shall mean the services that the Company or the Subsidiary
(i) currently provides, or (ii) has provided within the previous five years.

          “Customer
Termination” shall mean notice given by a customer to the Surviving Corporation
that such customer is terminating its customer relationship with the Surviving Corporation.

          “Damages”
shall mean any and all debts, obligations and other liabilities (whether absolute, accrued, contingent, fixed or
otherwise, or whether known or unknown, or due or to become due or otherwise), diminution in value,
monetary damages (but not incidental, consequential
or punitive damages), fines, fees, penalties, interest obligations,
deficiencies, losses and reasonable
expenses (including amounts paid in settlement, interest, court costs, reasonable costs of investigators, reasonable fees
and expenses of attorneys, accountants, financial advisors and other experts, and other expenses of
litigation).

          “Debt”
shall mean the sum of (a) all obligations of the Company for borrowed money, or
with respect to deposits or advances
of any kind to the Company, (b) all obligations of the Company evidenced by bonds, debentures, notes,
preferred stock or similar instruments, (c) all obligations of the Company upon
which interest charges are customarily paid, (d) all obligations of the Company
under conditional sale or other title retention agreements relating to property
purchased by the Company, (e) all
obligations of the Company issued or assumed as the deferred purchase price of
property or services (excluding obligations of the Company or creditors for raw
materials, inventory, services and
supplies incurred in the Ordinary Course of Business), (f) all capitalized
lease obligations of the Company, (g) all obligations of others secured by any
lien on property or assets owned or acquired by the Company, whether or not the
obligations secured thereby have been assumed, (h) all obligations of
the Company under interest rate or currency hedging
transactions (valued at the termination value thereof), (i) all letters of
credit issued for the account of the
Company, and (j) all guarantees and arrangements having the economic effect of
a guarantee by the Company of any indebtedness of any other person. For the
purposes of clarification, Debt does not include accounts payable or other
liabilities to the extent taken into account in calculating Closing Date
Working Capital as contemplated under Section 1.6 of this Agreement.

          “Disclosure
Schedule” shall mean the disclosure schedule provided by the Company to the Parent on the date hereof and accepted in
writing by the Parent.

          “Dispute”
shall mean the dispute resulting if the Indemnifying Party in a Response disputes its liability for all or part of the
Claimed Amount.

-62-

          “Dissenting
Share Consideration” shall have the meaning set forth in Section 1.8(a) of this Agreement.

          “Dissenting
Shares” shall mean Company Shares held as of the Effective Time by a Company Stockholder who has not voted such Company
Shares in favor of the adoption of this Agreement and with respect to which appraisal such Company Stockholder
shall be entitled to demand and
perfect in accordance with Section 3-202 of the MGCL following the Effective Time.

          “Earnout
Certificate” shall have the meaning set forth in Section 1.7(e) of this Agreement.

          “Earnout
Payment” shall have the meaning set forth in Section 1.7(b) of this
Agreement.

          “Effective
Time” shall mean the time at which the Surviving Corporation files the Maryland Articles of Merger with the Maryland
State Department of Assessments and Taxation.

          “Employee
Benefit Plan” shall mean any “employee pension benefit plan” (as defined in
Section 3(3) of ERISA), any “employee
welfare benefit plan” (as defined in Section 3(1) of ERISA), and any other written or oral plan,
agreement or arrangement involving direct or indirect compensation,
including insurance coverage, severance benefits, disability benefits, deferred compensation, bonuses, stock options,
stock purchase, phantom stock, stock appreciation
or other forms of incentive compensation or post-retirement compensation.

          “Environmental
Law” shall mean any federal, state or local law, statute, rule, order,
directive, judgment, Permit or regulation or the common law relating to the
environment, occupational health and
safety, or exposure of persons or property to Materials of Environmental
Concern, including any statute, regulation, administrative decision or order
pertaining to: (i) the presence of or the treatment, storage, disposal,
generation, transportation, handling, distribution, manufacture, processing,
use, import, export, labeling, recycling, registration, investigation or remediation
of Materials of Environmental Concern or documentation related to the
foregoing; (ii) air, water and noise pollution; (iii) groundwater and soil
contamination; (iv) the release, threatened
release, or accidental release into the environment, the workplace or other
areas of Materials of Environmental Concern, including emissions,
discharges, injections, spills, escapes or
dumping of Materials of Environmental Concern; (v) transfer of interests in or
control of real property which may be contaminated; (vi) community or worker
right-to-know disclosures with respect to Materials of Environmental Concern;
(vii) the protection of wild life, marine life and wetlands, and endangered and threatened species;
(viii) storage tanks, vessels, containers, abandoned or discarded barrels and
other closed receptacles; and (ix) health and safety of employees and other persons. As used above, the
term “release” shall have the meaning set forth in CERCLA.

          “Environmental
Permits” shall mean all permits, approvals, identification numbers, licenses and other authorizations required under
or issued pursuant to any applicable Environmental
Law.

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

-63-

          “ERISA
Affiliate” shall mean any entity which is, or at any applicable time was, a
member of (1) a controlled group of
corporations (as defined in Section 414(b) of the Code), (2) a group of
trades or businesses under common control (as defined in Section 414(c) of the Code), or (3) an affiliated service group (as
defined under Section 414(m) of the Code or the regulations under Section
414(o) of the Code), any of which includes or included the Company.

          “Escrow
Account” shall mean the escrow account with Escrow Agent in which the Escrow Amount is deposited.

          “Escrow
Agreement” shall mean an escrow agreement in substantially the form
attached hereto as Exhibit F. 

          “Escrow
Agent” shall mean the escrow agent under the Escrow Agreement, which shall
initially be US Bank, Los Angeles, California.

          “Escrow
Amount” shall mean (a) cash of $8,000,000 and (b) the First Earnout Period Payment, when and if paid.

          “Escrow
Fund” shall mean the fund established pursuant to the Escrow Agreement, including the amount paid by the Parent to the Escrow
Agent at the Closing pursuant to Section
1.9 of this Agreement.

          “Estimated
Net Debt” shall have the meaning set forth in Section 1.6(a)(ii) of this Agreement.

          “Estimated
Net Debt Adjustment” shall have the meaning set forth in Section 1.6(a)(ii)
of this Agreement.

          “Estimated
Working Capital” shall have the meaning set forth in Section 1.6(b)(ii) of
this Agreement.

          “Estimated Working Capital Adjustment”
shall have the meaning set forth in Section
1.6(b)(ii) of this Agreement.

          “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended.

          “Expected
Claim Notice” shall mean a notice that, as a result of a Legal Proceeding instituted by or written claim made by a third
party, an Indemnified Party reasonably expects to incur Damages for which it is entitled to
indemnification under Article VII.

          “Final
Balance Sheet” shall have the meaning set forth in Section 1.6(d)(i) of
this Agreement.

          “Final
Revised Cumulative Price” shall have the meaning set forth in Exhibit C
to this Agreement.

          “Financial
Statements” shall mean:

-64-

                    (a)     the
balance sheet and statement of income, change in stockholders’ equity and cash flows of the Company as of the end of and
for the last fiscal year, which shall be audited by Stout, Causey &
Horning, P.A. as the Company’s independent auditing firm; and

                    (b)     the
unaudited balance sheets and unaudited
statements of income, changes in
stockholders’ equity and cash flows of the Company for the seven (7) months
ended as of July 31, 2008; and

                    (c)     the
unaudited balance sheet of the Company as of
the Most Recent Balance Sheet Date.

          “First
Alternative Condition” shall have the meaning set forth in Section
1.9(b)(i) of this Agreement.

          “First
Condition” shall have the meaning set forth in Section 1.9(b)(i) of this
Agreement.

          “First
Earnout Period” shall have the meaning set forth in Section 1.7(a)(i) of
this Agreement.

          “First
Earnout Period Payment” shall have the meaning set forth in Section
1.7(a)(i) of this Agreement.

          “GAAP”
shall mean generally accepted accounting principles in the United States of America applied on a consistent basis.

          “Governmental
Entity” shall mean any government or any agency, bureau, board, commission, court, department, official, political
subdivision, tribunal or other instrumentality of any government, whether federal, state or local,
domestic or foreign.

          “Governmental
Order” means any order, writ, judgment, injunction, decree, stipulation,
determination or award entered by or with any Governmental Entity.

          “Hazardous
Materials” shall mean (a) petroleum and petroleum products, radioactive
materials, asbestos-containing materials, mold, urea formaldehyde foam
insulation, transformers or other
equipment that contain polychlorinated biphenyls and radon gas, (b) any other chemicals, materials or substances defined as or
included in the definition of “hazardous substances”, “hazardous wastes”, “hazardous materials”,
“extremely
hazardous wastes”, “restricted hazardous wastes”, “toxic substances”, “toxic
pollutants”, “contaminants” or “pollutants”,
or words of similar import, under any applicable Environmental Law, and (c) any
other chemical, material or substance which is regulated by any Environmental
Law.

          “Healthcare
Laws” shall have the meaning set forth in Section 2.29 of this Agreement. 

          “HIPAA” shall have the meaning set forth
in Section 2.21(f) of this Agreement.

          “HIPAA
Commitments” shall have the meaning set forth in Section 2.23(b) of this Agreement.

-65-

          “In-the-Money-Option”
shall have the meaning set forth in Exhibit C to this Agreement.

          “Indemnified
Party” shall mean a party entitled, or seeking to assert rights, to indemnification under Article VII.

          “Indemnifying
Party” shall mean the party from whom indemnification is sought by the Indemnified Party.

          “Indemnifying
Stockholders” shall have the meaning set forth in the first paragraph of this Agreement.

          “Information
Statement” shall mean that certain Information Statement dated on or about
the date of this Agreement furnished by the Company to the Constituents in
connection with the special meeting
of such Constituents.

          “Initial
Cumulative Price” shall have the meaning set forth in Exhibit C to
this Agreement.

          “Intellectual
Property” shall mean all:

                    (a)     patents,
patent applications, patent disclosures
and all related continuation, continuation-in-part, divisional, reissue,
reexamination, utility model, certificate of invention and design patents, patent applications,
registrations and applications for registrations;

                    (b)     trademarks,
service marks, trade dress, Internet
domain names, logos, trade names and
corporate names and registrations and applications for registration thereof;

                    (c)     copyrightable
works, copyrights and registrations
and applications for registration
thereof;

                    (d)     copyright,
confidential information and trade
secrets embodied in computer software and documentation;

                    (e)     inventions,
trade secrets and confidential business
information, whether patentable or
nonpatentable and whether or not reduced to practice, know-how, manufacturing
and product processes and techniques, research and development information,
financial, marketing and business
data, pricing and cost information, business and marketing plans and customer and supplier lists and information;

                    (f)     other
proprietary rights relating to any of the
foregoing (including remedies
against infringements thereof and rights of protection of interest therein
under the laws of all jurisdictions); and

                    (g)     copies
and tangible embodiments thereof.

          “Internal
Systems” shall mean the internal computer systems of the Company that are used in its and in connection with business or
operations, including computer hardware systems, software applications and
embedded systems.

-66-

          “Key
Employees” shall mean Don Good and Perry Snyder.

          “Knowledge”
of the Company shall mean the knowledge of the Key Employees and officers of the Company, or information which any
such individual should have known based on his primary or supervisory responsibility for the matter at issue with
the Company after due inquiry.
“Knowledge” of the Parent or the Merger Sub shall mean the knowledge of Steve Plochocki, Paul Holt, Patrick Cline and
Timothy
Eggena, or information which any such individual
should have known based on his primary or supervisory responsibility for the
matter at issue with the Parent or
the Merger Sub after due inquiry. 

          “Law”
means any federal, national, supranational, state, provincial, local or similar
statute, law, ordinance, regulation, rule, code, order, requirement or rule of
law (including common law).

          “Lease”
shall mean any lease or sublease pursuant to which the Company leases or subleases from another party any real property.

          “Leased
Real Property” means the real property leased by the Company as tenant, together with, to the extent leased by the
Company, all buildings and other structures, facilities or improvements currently located thereon, all
fixtures, systems, equipment and items of personal property of the Company
attached or appurtenant thereto and all easements, licenses, rights and
appurtenances relating to the foregoing.

          “Legal
Proceeding” shall mean any action, suit, proceeding, claim, arbitration or investigation before any Governmental Entity or
before any arbitrator or mediator.

          “Maryland
Articles of Merger” shall mean the articles of merger or other appropriate
documents prepared and executed in accordance with Section 3-110 of the MGCL in
form and substance reasonably satisfactory to the Parties.

          “Material
Contract” shall have the meaning set forth in Section 2.14(a) of this Agreement.

          “Materials
of Environmental Concern” shall mean any: pollutants, contaminants or hazardous
substances (as such terms are defined under CERCLA), pesticides (as such term
is defined under the Federal Insecticide,
Fungicide and Rodenticide Act), solid wastes and hazardous wastes (as such terms are defined under the Resource
Conservation and Recovery Act),
chemicals, other hazardous, radioactive or toxic materials, oil, petroleum and
petroleum products (and fractions thereof), or any other material (or article
containing such material) listed or subject to regulation under any law,
statute, rule, regulation, order, Permit, or directive due to its potential, directly or indirectly, to harm the
environment or the health of humans or other living beings.

          “Maximum
Allowable Closing Debt” shall have the meaning set forth in Section 1.6(a)(ii) of this Agreement.

          “Merger”
shall mean the merger of the Company with and into the Merger Sub in accordance with the terms of this Agreement.

-67-

          “Merger
Sub” shall have the meaning set forth in the first paragraph of this
Agreement. 

          “MGCL” shall have the
meaning set forth in Section 1.1 of this Agreement. 

          “Most
Recent Balance Sheet” shall mean the unaudited balance sheet of the Company
as of the Most Recent Balance Sheet
Date.

          “Most
Recent Balance Sheet Date” shall mean July 31, 2008.

          “Net
Debt” shall mean Debt minus any Cash as of the Closing, subject to such
other adjustments as may be specifically set forth on Section 1.6(d)(i) of the
Disclosure Schedule.

          “NextGen”
shall have the meaning set forth in the first paragraph of this Agreement.

          “Non-Executing
Stockholders” shall mean those Constituents who are not also Indemnifying Stockholders.

          “Option”
shall mean each option to purchase or acquire Company Shares.

          “Option
Termination Agreements” shall have the meaning set forth in Section
1.3(b)(ii) of this Agreement.

          “Ordinary
Course of Business” shall mean the ordinary course of business consistent
with recent past custom and practice
(within the past 24 months) (including with respect to frequency and amount).

          “Parent”
shall have the meaning set forth in the first paragraph of this Agreement.

          “Parent Shares” shall mean shares of common stock
of Quality Systems, Inc. 

          “Parent
Certificate” shall mean a certificate to the effect that each of the
conditions specified in Section 6.2
of this Agreement is satisfied in all respects.

          “Parent
Material Adverse Effect” shall mean any material adverse change, event, circumstance or development with respect to, or
material adverse effect on, the business, assets, liabilities, capitalization,
condition (financial or other), or results of operations of the Parent. For the
avoidance of doubt, the Parties agree that the terms “material,” “materially”
or “materiality” as used in this Agreement
with an initial lower case “m” shall have their respective customary and ordinary meanings, without regard to the
meaning ascribed to Parent Material Adverse Effect.

          “Parties”
or “Party” shall mean individually and collectively (as the case may be)
the Parent, NextGen, the Merger Sub,
the Company and the Indemnifying Stockholders.

          “Payment
Date” shall have the meaning set forth in Section 1.5(a) of this Agreement.

          “Payment
Information” shall have the meaning set forth in Section 1.9(e) of this Agreement.

-68-

          “Payment
Information Certificate” shall have the meaning set forth in Section 1.9(e)
of this Agreement.

          “Per
Hour Rate” shall mean a director’s or employee’s (as applicable) annual
total compensation (including salary and
bonus) divided by 2,000 hours.

          “Permits”
shall mean all permits, licenses, registrations, certificates, orders,
approvals, franchises, variances and similar rights issued by or obtained from
any Governmental Entity (including
those issued or required under Environmental Laws and those relating to the occupancy or use of owned or leased real
property).

          “Person”
shall mean any natural person, corporation, limited liability company, general or limited partnership, proprietorship, other
business, non-profit or charitable organization, trust, union,
association (whether or not incorporated in any jurisdiction), or any court,
arbitration tribunal, administrative agency
or commission or other governmental or regulatory authority or agency.

          “Post-Closing
Net Income” shall mean the after-tax net income of the Surviving Corporation (assuming an income tax rate of 40%)
after the Closing, but excluding any expenses which are also indemnifable Damages under Sections 1.6, Section 1.8,
Article VII or Article VIII;
provided, however, that with respect to clients and customers that are
“Qualified Referrals” only 50% of the
revenues and expenses (including revenues and expenses associated with NextGen
EMR and/or PM licenses bundled into billing contracts) associated with such
clients shall be included in the calculation
of “Post-Closing Net Income.” For purposes hereof, Qualified Referrals shall mean clients and
customers of Surviving Corporation referred to Surviving Corporation by NextGen who have expressed an interest in, and
are financially capable of contracting for, revenue cycle management
services. For purposes of clarity, any payments of the Bonus Pool shall be an
expense to the Surviving Corporation for purposes of calculating “Post-Closing Net Income.”

          “Pro
Rata Share” of any particular Indemnifying Stockholder shall mean the total
number of shares of Company Shares owned by such Indemnifying
Stockholder (calculated to include the Company Shares that would be owned by
such Indemnifying Stockholder as a result of the exercise of any Option) divided by the total number of Company Shares
owned by all of the Constituents
(calculated to include the Company Shares that would be owned by such Constituents as a result of the exercise of any
Option).

          “Reasonable
Best Efforts” shall mean best efforts, to the extent commercially
reasonable.

          “Release”
means disposing, discharging, injecting, spilling, leaking, leaching, dumping,
emitting, escaping, emptying, seeping, placing, appearing and the like into or
upon any land, building, surface, subsurface or water or air or otherwise
entering into the Environment.

          “Releasees”
shall have the meaning set forth in Section 1.12(a) of this Agreement.

          “Requisite
Stockholder Approval” shall mean the adoption of this Agreement and the approval of the Merger by a two-thirds vote of all
the holders of Company Shares entitled to vote on this Agreement and the Merger as set forth in Section 3-105(e) of
the MGCL.

-69-

          “Response”
shall mean a written response containing the information provided for in Section 7.3(e) or Section 8.5(b)(v), as
applicable.

          “Revised
Cumulative Price” shall have the meaning set forth in Exhibit C to
this Agreement.

          “Rule”
shall mean any constitution or statute or law or any judgment, decree,
injunction, order, ruling, ordinance
or final regulation or rule of any Governmental Entity, including, without limitation, those relating to disclosure,
usury, equal credit opportunity, equal employment,
environment, employee safety and health, fair credit reporting and
anti-competitive activities.

          “Securities
Act” shall mean the Securities Act of 1933, as amended.

          “Security
Interest” shall mean any mortgage, pledge, security interest, encumbrance, charge or other lien (whether arising by contract
or by operation of law), other than (i) mechanic’s, materialmen’s, and
similar liens, (ii) liens arising under worker’s compensation, unemployment
insurance, social security, retirement, and similar legislation, (iii) liens
for taxes not yet due and payable, and (iv)
liens on goods in transit incurred pursuant to documentary letters of credit, in each case arising in the
Ordinary Course of Business of the Company and not material to the Company.

          “Second
Alternative Condition” shall have the meaning set forth in Section
1.9(b)(i) of this Agreement.

          “Second
Earnout Period” shall have the meaning set forth in Section 1.7(a)(ii) of
this Agreement.

          “Second
Earnout Period Payment” shall have the meaning set forth in Section
1.7(a)(ii) of this Agreement.

          “Second
Earnout Threshold” shall have the meaning set forth in Section 1.7(a)(ii)
of this Agreement.

          “SFAS”
shall mean Statement of Financial Accounting Standards.

          “Share
Valuation Method” shall mean the valuation of the Parent Shares based upon
the average closing price of Parent’s common stock as reported by the Nasdaq
Global Select Market over the 45 trading days ending on the trading day
immediately prior to the Closing Date.

          “Significant
Person” shall mean a Person listed in Section 2.24 of the Disclosure Schedule.

          “Software”
shall mean any of the software (including the documentation thereto) owned by the Company and any software included with any
of the Company’s products and/or services or the Internal Systems.

-70-

          “Stockholder
Representatives” shall have the meaning set forth in Section 1.14(a) of
this Agreement.

          “Stockholder
Transmittal Letter” shall have the meaning set forth in Section 1.3(b)(i)
this Agreement.

          “Surviving
Corporation” shall mean the Company following the Closing, as the surviving
corporation in the Merger.

          “Target
Net Debt” shall have the meaning set forth in Section 1.6(a)(i) of this
Agreement.

          “Target
Region” shall have the meaning set forth in Section 1.7(g)(ii) of this
Agreement.

          “Target
Working Capital” shall have the meaning set forth in Section 1.6(b)(i) of
this Agreement.

          “Taxes”
(including with correlative meaning “Tax” and “Taxable”) shall mean (a) any and
all taxes, and any and all other charges, fees, levies, duties, deficiencies,
customs or other similar assessments or
liabilities in the nature of a tax, including without limitation any income, gross
receipts, ad valorem, net worth, premium, value-added, alternative or add-on
minimum, excise, severance, stamp, occupation, windfall profits, real property,
personal property, assets, sales, use,
capital stock, capital gains, documentary, recapture, transfer, transfer gains,
estimated, withholding, employment,
unemployment insurance, unemployment compensation, social security, business license, business
organization, environmental, workers compensation, payroll, profits, license, lease, service, service use,
gains, franchise and other taxes imposed by any federal, state, local, or foreign Governmental Entity, (b) any interest,
fines, penalties, assessments, or
additions resulting from, attributable to, or incurred in connection with any
items described in this paragraph or any contest or dispute thereof, and
(c) any items described in this paragraph
that are attributable to another person but that the Company is liable to pay
by law, by contract, or otherwise.

          “Tax
Returns” shall mean any and all reports, returns, declarations, statements,
forms, or other information required to be supplied to a Governmental Entity or
to any individual or entity in connection with Taxes and any associated
schedules, attachments, work papers or other information
provided in connection with such items, including any amendments, thereof.

          “Third
Party Action” shall mean any suit or proceeding by a person or entity other
than a Party for which indemnification may be sought by a Party under Article
VII.

          “Total
Share” of any particular Indemnifying Stockholder shall mean the total
number of shares of Company Shares owned by such Indemnifying Stockholder
(calculated to include the Company
Shares that would be owned by such Indemnifying Stockholder as a result of the exercise of any Option) divided by the total
number of Company Shares owned by all of the Indemnifying Stockholders (calculated to include the Company Shares
that would be owned by such Indemnifying Stockholders as a result of the
exercise of any Option).

          “Trading
Partners” shall have the meaning set forth in Section 2.29(c) of this
Agreement.

-71-

          “Warrant”
shall mean each warrant or other contractual right to purchase or acquire Company Shares, provided that Options shall not
be considered Warrants.

ARTICLE XI

MISCELLANEOUS

          11.1     Press
Releases; Announcements; Confidentiality. The Parties have agreed to the
form of press release to be issued promptly after the Closing. The Company
agrees that it shall not issue any other press release or public announcement
or make any statement to third parties relating
to the subject matter of this Agreement (including disclosure of any terms of
this Agreement) without the prior
written approval of the Parent.

          11.2     No
Third Party Beneficiaries. This Agreement shall not confer any rights or
remedies upon any person other than the Parties and their respective successors
and permitted assigns.

          11.3     Entire
Agreement. This Agreement (including the documents referred to herein),
constitutes the entire agreement among the Parties with respect to the subject
matter hereof, and supersedes any prior or contemporaneous understandings,
agreements or representations by or among the Parties, written or oral, express
or implied, which may have related to the subject matter hereof in any way.

          11.4     Succession
and Assignment. This Agreement shall be binding upon and inure to the
benefit of the Parties named herein, the Constituents, and their respective
successors and permitted assigns. No Party may assign either this Agreement or
any of its rights, interests or obligations hereunder without the prior written
approval of the other Parties. QSI may assign to affiliated parties as they
exist now or in the future.

          11.5     Counterparts
and Facsimile Signature. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed to be an original copy
of this Agreement and all of which together shall be deemed to constitute one
and the same agreement. The exchange of copies of this Agreement and of
signature pages by facsimile transmission shall constitute effective execution
and delivery of this Agreement as to the Parties and may be used in lieu of the
original Agreement and signature pages thereof for all purposes.

          11.6     Headings.
The section headings contained in this Agreement are inserted for convenience
only and shall not affect in any way the meaning or interpretation of this
Agreement.

          11.7
    Notices. All notices, requests, demands, claims, and other
communications hereunder shall be in writing. Any notice, request, demand,
claim or other communication hereunder shall be deemed duly delivered four business
days after it is sent by registered or certified mail, return receipt
requested, postage prepaid, or one business day after it is sent for next
business day delivery via a reputable nationwide overnight courier service, in
each case to the intended recipient as set forth below:

-72-

	
 

	
 

	
 

	
If to the
 Company and the Indemnifying
 Stockholders:

	
 

	
Copy to
 (which shall not constitute notice): 

	
 

	
 

	
 

	
 

	
 

	
Whiteford, Taylor & Preston
 L.L.P. 

	
 

	
 

	
Seven Saint Paul Street 

	
Perry Snyder

	
 

	
Suite 1500 

	
2405 Velvet Ridge Dr.

	
 

	
Baltimore, MD 21202 

	
Owings Mills, MD 21117

	
 

	
Attn: William M. Davidow, Esq.
 

	
Telecopy: (443) 933-4292

	
 

	
Telecopy: (410) 223-4367
 

	
Telephone: (717) 993-3882

	
 

	
Telephone: (410) 347-8767
 

	
 

	
 

	
 

	
And

	
 

	
 

	
 

	
 

	
 

	
Don Good

	
 

	
 

	
16 Heritage Farm Dr

	
 

	
 

	
New Freedom, PA 17349

	
 

	
 

	
Telecopy: (443) 933-4304

	
 

	
 

	
Telephone: (410) 363-4899

	
 

	
 

	
 

	
 

	
 

	
If to the
 Merger Sub or the Parent:

	
 

	
Copy to
 (which shall not constitute notice):

	
 

	
 

	
 

	
Quality Systems, Inc.

	
 

	
Rutan & Tucker, LLP 

	
18111 Von Karman Avenue,

	
 

	
611 Anton Boulevard, 14th
 Floor 

	
Suite 600

	
 

	
Costa Mesa, California 92626
 

	
Irvine, California 92612

	
 

	
Attn: Thomas J. Crane 

	
Attn: Chief Executive Officer

	
 

	
Telecopy (714) 546-9035 

	
Telecopy: (949) 255-2610

	
 

	
Telephone: (714) 641-5100
 

	
Telephone: (949) 255-2600

	
 

	
 

          Any
Party may give any notice, request, demand, claim or other communication hereunder
using any other means (including personal delivery, expedited courier,
messenger service, telecopy or ordinary
mail) other than electronic mail, but no such notice, request, demand, claim or other communication shall be
deemed to have been duly given unless and until it actually is received by the party for whom it is intended. Any Party
may change the address to which
notices, requests, demands, claims, and other communications hereunder are to
be delivered by giving the other
Parties notice in the manner herein set forth.

          11.8     Governing
Law; Consent to Jurisdiction and Venue.

                      (a)     This
Agreement shall be governed by and construed in accordance with the MGCL, and as to all other matters (including
the validity and applicability of the arbitration provisions of this
Agreement, the enforcement of any arbitral award made hereunder and any other
questions of arbitration law or procedure arising hereunder) shall be governed
by and construed in accordance with the
internal laws of the State of Maryland without giving effect to any choice or conflict of law provision or rule
(whether of the State of Maryland or any other

-73-

jurisdiction) that would
cause the application of laws of any jurisdictions other than those of the State of Maryland.

                       (b)     Subject
to Section 1.7(f) hereof, which the Parties intend to be the sole and exclusive remedy with respect to disputes concerning
Earnout Payments, all actions and proceedings
arising out of or relating to this Agreement will be heard and determined in a Maryland court or a federal court sitting in
Baltimore, Maryland, and the Parties hereby irrevocably submit to the
exclusive jurisdiction of such courts in any such action or proceeding and irrevocably waive the defense of an
inconvenient forum to the maintenance of any such action or proceeding.
The Parties hereby consent to service of process by mail (in accordance with Section 11.7) or any other manner permitted
by law.

          11.9      Amendments
and Waivers. The Parties may mutually amend any provision of this Agreement at
any time prior to the Closing. No amendment of any provision of this Agreement
shall be valid unless the same shall be in writing and signed by all of the
Parties. No waiver of any right or remedy hereunder shall be valid unless the
same shall be in writing and signed by the Party giving such waiver. No waiver
by any Party with respect to any default, misrepresentation or breach of
warranty or covenant hereunder shall be deemed to extend to any prior or
subsequent default, misrepresentation or breach of warranty or covenant
hereunder or affect in any way any rights arising by virtue of any prior or
subsequent such occurrence. 

          11.10     Severability. Any
term or provision of this Agreement that is invalid or unenforceable in any
situation in any jurisdiction shall not affect the validity or enforceability
of the remaining terms and provisions hereof or the validity or enforceability
of the offending term or provision in any other situation or in any other
jurisdiction. If the final judgment of a court of competent jurisdiction
declares that any term or provision hereof is invalid or unenforceable, the
Parties agree that the court making the determination of invalidity or
unenforceability shall have the power to limit the term or provision, to delete
specific words or phrases, or to replace any invalid or unenforceable term or
provision with a term or provision that is valid and enforceable and that comes
closest to expressing the intention of the invalid or unenforceable term or
provision, and this Agreement shall be enforceable as so modified. 

          11.11     Construction.

                        (a)     The
language used throughout this Agreement shall be deemed to be the language
chosen by the Parties to express their mutual intent, and no rule of strict
construction shall be applied against any Party.

                        (b)     All
terms and words used in this Agreement, regardless of whether singular or
plural, or the gender in which they are used, shall be deemed to include any
other number and any other gender as the context may require.

                        (c)     Any
reference to any federal, state, local or foreign statute or law shall be
deemed also to refer to all rules and regulations promulgated thereunder,
unless the context requires otherwise.

                        (d)     Any
reference herein to “including” shall be interpreted as “including without
limitation”.

-74-

                         (e)     Any
reference to any Article, Section or paragraph shall be deemed to refer to an Article, Section or paragraph of this
Agreement, unless the context clearly indicates otherwise.

          11.12
     Attorneys’ Fees. In the event of any litigation or arbitration
proceeding arising out of any disputes under this Agreement, the
prevailing party shall be entitled to recover their costs and expenses
including, without limitation, reasonable attorneys’ fees. In the event the dispute is regarding an amount or number, the term
“prevailing party” as used in the immediately preceding sentence shall be deemed to mean the party whose claimed
number or amount at the outset of such litigation or arbitration is
nearest in value to the number of amount as finally determined by the court in
the event of litigation (after the exhaustion, expiration or termination of all parties’ right to appeal) or by the
arbitrator in the event of arbitration.

[Signature page follows]

-75-

SIGNATURE
PAGE TO AGREEMENT AND PLAN OF MERGER 

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

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 QUALITY
 SYSTEMS, INC.

 
	
  

 	
  

 
	
  

 	
 By:

 	

 
	
  

 	
  

 	
 

 
	
  

 	
 Name:

 	
 STEVEN PLOCHOCKI

 
	
  

 	
  

 	
 

 
	
  

 	
 Title:

 	
 CEO

 
	
  

 	
 

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 NEXTGEN
 HEALTHCARE INFORMATION 

 SYSTEMS, INC

 
	
  

 	
  

 
	
  

 	
 By:

 	

 
	
  

 	
  

 	
 

 
	
  

 	
 Name:

 	
 PATRICK CLINE

 
	
  

 	
  

 	
 

 
	
  

 	
 Title:

 	
 PRESIDENT

 
	
  

 	
 

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 RUTH
 MERGER SUB, INC.

 
	
  

 	
  

 
	
  

 	
 By:

 	

 
	
  

 	
  

 	
 

 
	
  

 	
 Name:

 	
 PATRICK CLINE

 
	
  

 	
  

 	
 

 
	
  

 	
 Title:

 	
 PRESIDENT

 
	
  

 	
 

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 PRACTICE
 MANAGEMENT PARTNERS, INC.

 
	
  

 	
  

 
	
  

 	
 By:

 	
  

 
	
  

 	
  

 	
 

 
	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	
 

 
	
  

 	
 Title:

 
	
  

 	
 

 

	
  

 	
  

 
	
  

 	
 INDEMNIFYING
 STOCKHOLDERS:

 
	
  

 	
  

 
	
  

 	
 

 
	
  

 	
 PERRY SNYDER

 
	
  

 	
  

 
	
  

 	
 

 
	
  

 	
 DONALD GOOD

 

-76-

SIGNATURE
PAGE TO AGREEMENT AND PLAN OF MERGER 

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

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 QUALITY
 SYSTEMS, INC.

 
	
  

 	
  

 
	
  

 	
 By:

 	
  

 
	
  

 	
  

 	
 

 
	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	
 

 
	
  

 	
 Title:

 
	
  

 	
 

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 NEXTGEN
 HEALTHCARE INFORMATION 

 SYSTEMS, INC

 
	
  

 	
  

 
	
  

 	
 By:

 	

 
	
  

 	
  

 	
 

 
	
  

 	
 Name:

 	
 PATRICK CLINE

 
	
  

 	
  

 	
 

 
	
  

 	
 Title:

 	
 PRESIDENT

 
	
  

 	
 

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 RUTH
 MERGER SUB, INC.

 
	
  

 	
  

 
	
  

 	
 By:

 	

 
	
  

 	
  

 	
 

 
	
  

 	
 Name:

 	
 PATRICK CLINE

 
	
  

 	
  

 	
 

 
	
  

 	
 Title:

 	
 PRESIDENT

 
	
  

 	
 

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 PRACTICE
 MANAGEMENT PARTNERS,
 INC.

 
	
  

 	
  

 
	
  

 	
 By:

 	

 
	
  

 	
  

 	
 

 
	
  

 	
 Name:

 	
 DONALD S. GOOD

 
	
  

 	
  

 	
 

 
	
  

 	
 Title:

 	
 PRESIDENT

 
	
  

 	
 

 

	
  

 	
  

 
	
  

 	
 INDEMNIFYING
 STOCKHOLDERS:

 
	
  

 	

 
	
  

 	
 

 
	
  

 	
 PERRY SNYDER

 
	
  

 	

 
	
  

 	
 

 
	
  

 	
 DONALD GOOD

 

-76-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00152-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00152-of-00352.parquet"}]]